Santa Barbara City Council
May 16, 2023

CITY OF SANTA BARBARA

FINANCE COMMITTEE MEETING

MEETING AGENDA
DATE: May 16, 2023 Eric Friedman, Chair
TIME: 12:00 PM Alejandra Gutierrez
PLACE: David Gebhard Public Meeting Room Meagan Harmon
630 Garden Street
Rebecca Bjork Keith DeMartini
City Administrator Finance Director
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ITEMS FOR CONSIDERATION:

1. Subject: Fiscal Year 2023 Third-Quarter Review
Recommendation: That Finance Committee:

A. Receive a report from staff on the status of revenues and expenditures in relation to budget for the nine months ended March 31, 2023;
B. Accept the Fiscal Year (FY) 2023 Interim Financial Statements for the nine months ended March 31, 2023; and
C. Recommend that Council approve proposed Third Quarter (Q3) adjustments to FY 2023 appropriations and estimated revenues as detailed in the attached schedule of Proposed Q3 adjustments.

2. Subject: Finance Committee Review of the Fiscal Year 2024 Recommended Budget
Recommendation: That Finance Committee:

A. Hear a report from staff on General Fund non-departmental revenues, including growth assumptions, in connection with the Committee’s review of the Fiscal Year 2024 Recommended Budget;
B. Hear a report from staff, in connection with the Recommended Budget for Fiscal Year 2024, on staff recommended Adjustments;
C. Recommend the City Council approve the Cost Recovery and Revenue Policy; and D. Develop final recommendations to Council based on the Committee’s review of the recommended budget and proposed fee changes.

CITY OF SANTA BARBARA

FINANCE COMMITTEE AGENDA REPORT
AGENDA DATE: May 16, 2023
TO: Finance Committee
FROM: Accounting Division, Finance Department
SUBJECT: Fiscal Year 2023 Third-Quarter Review
RECOMMENDATION: That Finance Committee:

A. Receive a report from staff on the status of revenues and expenditures in relation to budget for the nine months ended March 31, 2023;
B. Accept the Fiscal Year (FY) 2023 Interim Financial Statements for the nine months ended March 31, 2023; and
C. Recommend that Council approve proposed Third Quarter (Q3) adjustments to FY 2023 appropriations and estimated revenues as detailed in the attached schedule of Proposed Q3 adjustments.

DISCUSSION:

Each month, staff present interim financial statements (Attachment 1) showing the status of revenues and expenditures in relation to budget for City Funds. Each quarter, the interim financial statements are expanded to include a detailed narrative analysis of General Fund and Enterprise Funds (Attachment 2).

In addition to the Q3 budget analysis, staff bring forward recommended adjustments for City Council approval. These adjustments are a result of new information and/or unanticipated events that occurred since the adoption of the budget in June 2022. A listing and description of each proposed current year adjustment is provided in Attachment 3.

Due to economic uncertainties articulated in the FY2023 adopted budget, a required budget reduction plan of $1.0 million was implemented and allocated amongst all General Fund departments. Staff reviewed and consolidated Q3 revenue and expenditure adjustments into the Q3 report for City Council’s approval. For General Fund departments, budget reduction targets have been met or will be met by end-of-year.

These reductions help achieve a balanced budget, which mitigates risk.

Agenda Item No. 1
File Code No. 120.03
Finance Committee Agenda Report
Fiscal Year 2023 Third-Quarter Review
May 16, 2023

The table below summarizes the General Fund revenue and expenditure budget including actuals through Q3. The total adopted revenue budget is $184.6 million and the total adopted expenditure budget is $185.7 million, resulting in an operating deficit of $1.1 million. The revised budget includes additional expenditures from encumbrances from prior year contractual commitments, along with any City Council approved adjustments since beginning of the year.

Staff anticipate continued economic recovery from the impacts of COVID-19, which aligns with sales/use tax and transient occupancy tax (TOT) revenue actual trends when comparing the prior fiscal year and FY2023 adopted budget. Staff are projecting that property tax revenue will be $1.2 million more than the adopted budget. Sales tax and TOT leveled off in FY2023. Staff is projecting a $2.7 million deficit in the General Fund by the end of FY2023 due to some lower department revenues, additional expenditure appropriations of $1.1 million for the short-term rental enforcement program in the City Attorney’s Office budget, and lower attrition savings from the recruiting and hiring of multiple City positions reducing the City’s vacancy rate.

Staff are not recommending any additional budget reduction strategies to balance the budget by the end of FY2023. However, staff will continue to closely monitor revenues, expenditures, fund balance, and reserves each month, and will provide a comprehensive financial projection during the fourth quarter report to address material economic changes.

ATTACHMENTS: 1. Summary by Fund Statement of Revenues and Expenditures for Nine Months Ended March 31, 2023

2. Interim Financial Statements for Nine Months Ended March 31, 2023 (Narrative Analysis)

3. Schedule of Proposed Third Quarter Adjustments
PREPARED BY: Jessica Yates, Accounting Supervisor
SUBMITTED BY: Keith DeMartini, Finance Director
APPROVED BY: City Administrator's Office
General Fund
FY2023 Adopted
Budget
FY2023 Revised
Budget
Actuals through
Q3
FY2023
Projection
Actuals
Percent of
Revised
Budget
Revenues $184,618,453 $184,647,547 $136,213,216 $194,557,283 73.8% Expenditures 185,678,749 201,115,308 137,344,647 197,289,629 68.3% Surplus/(Deficit) ($1,060,296) ($16,467,761) ($1,131,431) ($2,732,346) ATTACHMENT 1
Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD
GENERAL FUND (pages 3-7)
Revenue 184,647,548 136,213,217 3,005 48,437,335 73.8% 133,710,721 Expenditures 201,115,309 137,344,645 3,153,610 60,617,053 69.9% 126,218,277 Addition to / (use of) reserves (16,467,761) (1,131,428) (3,156,615) 7,492,444 SOLID WASTE FUND (page 9)
Revenue 34,272,920 25,802,740 - 8,470,180 75.3% 24,973,830 Expenditures 35,032,808 23,915,706 924,742 10,192,360 70.9% 21,331,690 Addition to / (use of) reserves (759,888) 1,887,034 (924,742) 3,642,140 WATER OPERATING FUND (page 10)
Revenue 70,492,814 51,903,459 - 18,589,355 73.6% 50,296,311 Expenditures 71,954,226 46,195,188 4,823,257 20,935,781 70.9% 47,886,910 Addition to / (use of) reserves (1,461,412) 5,708,271 (4,823,257) 2,409,401 WASTEWATER OPERATING FUND (page 11)
Revenue 27,441,554 20,165,426 - 7,276,128 73.5% 19,027,755 Expenditures 28,242,939 19,083,646 1,211,683 7,947,610 71.9% 18,357,815 Addition to / (use of) reserves (801,385) 1,081,780 (1,211,683) 669,940 DOWNTOWN PARKING FUND (page 12)
Revenue 10,616,997 7,395,703 - 3,221,294 69.7% 5,037,010 Expenditures 10,749,896 7,385,986 844,868 2,519,043 76.6% 5,781,915 Addition to / (use of) reserves (132,899) 9,718 (844,868) (744,905) AIRPORT OPERATING FUND (page 13)
Revenue 27,185,151 18,750,192 - 8,434,959 69.0% 23,641,680 Expenditures 30,513,124 18,547,996 2,684,510 9,280,619 69.6% 18,739,152 Addition to / (use of) reserves (3,327,973) 202,196 (2,684,510) 4,902,529 GOLF COURSE FUND (page 14)
Revenue 4,042,489 2,938,237 - 1,104,252 72.7% 2,860,096 Expenditures 3,499,658 2,178,339 1,129,957 191,362 94.5% 2,060,587 Addition to / (use of) reserves 542,831 759,898 (1,129,957) 799,509 FACILITIES MANAGEMENT FUND (page 15)
Revenue 7,124,899 5,144,326 - 1,980,573 72.2% 4,742,640 Expenditures 7,277,281 5,061,427 218,129 1,997,725 72.5% 4,781,665 Addition to / (use of) reserves (152,382) 82,898 (218,129) (39,025)

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
Summary by Fund
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
Summary by Fund
For Nine Months Ended March 31, 2023 (75% of Fiscal Year) FLEET REPLACEMENT FUND (page 16)
Revenue 3,785,316 2,714,825 - 1,070,491 71.7% 2,562,132 Expenditures 4,169,284 1,042,354 1,585,623 1,541,308 63.0% 2,285,649 Addition to / (use of) reserves (383,968) 1,672,471 (1,585,623) 276,483 FLEET MAINTENANCE FUND (page 17)
Revenue 3,226,802 2,429,295 - 797,507 75.3% 2,242,442
Expenditures 3,282,043 2,200,106 303,597 778,341 76.3% 2,234,715 Addition to / (use of) reserves (55,241) 229,189 (303,597) 7,726 SELF INSURANCE TRUST FUND (page 18)
Revenue 17,067,765 13,781,377 - 3,286,388 80.7% 7,859,027 Expenditures 14,201,213 10,086,801 355,227 3,759,185 73.5% 8,383,280 Addition to / (use of) reserves 2,866,552 3,694,576 (355,227) (524,253) INFORMATION TECHNOLOGY FUND (page 19)
Revenue 5,261,982 3,805,393 - 1,456,589 72.3% 3,399,487 Expenditures 5,483,353 3,903,566 50,817 1,528,969 72.1% 3,541,577 Addition to / (use of) reserves (221,371) (98,173) (50,817) (142,090) WATERFRONT OPERATING FUND (page 20)
Revenue 17,036,131 14,062,765 - 2,973,366 82.5% 13,207,764 Expenditures 19,277,251 13,336,210 959,765 4,981,276 74.2% 11,571,647 Addition to / (use of) reserves (2,241,119) 726,555 (959,765) 1,636,116 SANTA BARBARA CLEAN ENERGY FUND (page 21)
Revenue 34,000,000 24,966,910 - 9,033,090 73.4% 5,130,569 Expenditures 33,480,425 25,171,335 1,243,866 7,065,224 78.9% 5,045,319 Addition to / (use of) reserves 519,575 (204,425) (1,243,866) 85,250 ENERGY AND CLIMATE MANAGEMENT FUND (page 22)
Revenue 2,646,168 1,998,026 - 648,142 75.5% 1,946,404
Expenditures 3,117,338 1,713,056 205,104 1,199,178 61.5% 1,367,824 Addition to / (use of) reserves (471,170) 284,971 (205,104) 578,580

TOTAL FOR ALL FUNDS
Revenue 448,848,536 332,071,891 3,005 116,779,649 74.0% 300,637,867 Expenditures 471,396,149 317,166,360 19,694,754 134,535,035 71.5% 279,588,021 Addition to / (use of) reserves (22,547,613) 14,905,531 (19,697,759) 21,049,846 ** It is City policy to adopt a balanced budget. In most cases, encumbrance balances exist at year-end. These encumbrance balances are obligations of each fund and must be reported at the beginning of each fiscal year. In addition, a corresponding appropriations entry must be made in order to accommodate the 'carried-over' encumbrance amount. Most differences between budgeted annual revenues and expenses are due to these encumbrance carryovers.

Revised YTD Remaining Percent Previous Change Over
Budget Actual Balance Received YTD Prior Year
TAXES
Sales and Use 26,704,042 22,087,846 4,616,196 82.7% 21,770,112 1.5% Measure C Sales Tax 28,323,342 23,721,079 4,602,263 83.8% 23,212,483 2.2% Property Taxes 43,250,489 24,327,523 18,922,966 56.2% 22,881,722 6.3% Utility Users Tax 7,779,112 6,020,007 1,759,105 77.4% 5,760,313 4.5% Transient Occupancy Tax 23,583,553 20,096,552 3,487,001 85.2% 19,224,728 4.5% Business License 2,714,006 2,365,663 348,343 87.2% 2,235,978 5.8% Cannabis Excise Tax 1,879,977 980,863 899,114 52.2% 1,246,066 -21.3% Real Property Transfer Tax 1,328,218 706,430 621,788 53.2% 1,035,870 -31.8% Total Tax Revenues 135,562,739 100,305,962 35,256,777 74.0% 97,367,273 3.0%

LICENSES & PERMITS
Licenses & Permits 159,858 127,113 32,745 79.5% 154,087 -17.5% Total 159,858 127,113 32,745 79.5% 154,087 -17.5%

FINES & FORFEITURES
Police 2,358,618 1,062,861 1,295,757 45.1% 1,964,136 -45.9% Other Fines & Forfeitures 660,302 328,939 331,363 49.8% 56,581 481.4% Total 3,018,920 1,391,801 1,627,119 46.1% 2,020,716 -31.1%

USE OF MONEY & PROPERTY
Investment Income 529,185 1,003,953 (474,768) 189.7% 312,914 220.8% Rents & Concessions 1,392,631 996,831 395,800 71.6% 657,180 51.7% Total 1,921,816 2,000,784 (78,968) 104.1% 970,094 106.2%

INTERGOVERNMENTAL
Library 905,598 889,143 16,454 98.2% 712,410 24.8%
Fire 550,000 479,972 70,028 87.3% 2,223,308 -78.4%
Other Intergovernmental 717,492 540,870 176,622 75.4% 584,655 -7.5% Total 2,173,090 1,909,985 263,105 87.9% 3,520,373 -45.7%

FEES & SERVICE CHARGES
Community Development 6,713,279 5,612,887 1,100,392 83.6% 5,576,934 0.6% Parks & Recreation 4,565,730 2,737,724 1,828,006 60.0% 2,332,136 17.4% Other Service Charges 4,042,475 3,254,804 787,671 80.5% 2,532,932 28.5% Total 15,321,484 11,605,414 3,716,070 75.7% 10,442,002 11.1%

OTHER REVENUES
Interfund Charges & Reimbursement 11,944,594 8,144,118 3,800,476 68.2% 7,421,223 9.7% Overhead Indirect Allocations 9,654,155 7,177,928 2,476,227 74.4% 6,740,294 6.5% Interfund Transfers 592,510 483,974 108,536 81.7% 1,338,111 -63.8% Interfund Loans 24,140 18,105 6,035 75.0% 18,105 0.0%
Miscellenous 128,442 133,103 (4,661) 103.6% 606,527 -78.1% Donations 138,709 54,802 83,907 39.5% 63,841 -14.2%
Franchise Fees 4,007,090 2,860,127 1,146,963 71.4% 3,048,075 -6.2% Total 26,489,640 18,872,158 7,617,482 71.2% 19,236,176 -1.9% Subtotal Non-Tax Revenues 49,084,809 35,907,256 13,177,553 73.2% 36,343,448 -1.2% TOTAL REVENUES 184,647,548 136,213,217 48,434,330 73.8% 133,710,721 1.9%

CITY OF SANTA BARBARA
General Fund
Interim Statement of Budgeted and Actual Revenues
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

YTD
Expended
Revised YTD Encum- Remaining and Previous
Budget Actual brances Balance Encumbered YTD

GENERAL GOVERNMENT
Mayor & City Council
MAYOR & CITY COUNCIL 1,054,553 743,502 2,321 308,730 70.7% 668,425 ARTS AND COMMUNITY PROMOTIONS 2,315,403 1,831,827 476,115 7,461 99.7% 1,762,282 Total 3,369,956 2,575,329 478,436 316,191 90.6% 2,430,706 City Attorney
CITY ATTORNEY-ADMINISTRATION 1,053,401 777,492 113,406 162,504 84.6% 786,168 CITY ATTORNEY-ADVISORY 1,545,447 1,207,309 35,000 303,138 80.4% 1,058,472 CITY ATTORNEY-CIVIL LITIGATION 1,430,514 984,396 - 446,118 68.8% 793,400 CITY ATTORNEY-CODE ENFORCEMENT 1,686,545 335,602 - 1,350,942 19.9% 349,605 Total 5,715,907 3,304,799 148,406 2,262,702 60.4% 2,987,645 Administration
CITY ADMINISTRATOR 2,601,441 1,609,709 101,841 889,891 65.8% 1,650,976 CITY TV 725,003 544,140 19,035 161,827 77.7% 476,421
CITY CLERK 721,579 485,854 22,128 213,597 70.4% 518,837 Total 4,048,022 2,639,703 143,004 1,265,315 68.7% 2,646,234 Human Resources
HUMAN RESOURCES 2,586,521 1,457,971 31,516 1,097,034 57.6% 1,396,264 EMPLOYEE RELATIONS 418,693 226,338 82,319 110,036 73.7% 177,207 EMPLOYEE DEVELOPMENT 42,699 14,538 - 28,161 34.0% 4,000 Total 3,047,913 1,698,847 113,835 1,235,231 59.5% 1,577,470 Finance
ADMINISTRATION 326,809 248,336 10,793 67,681 79.3% 289,442 REVENUE & CASH MANAGEMENT 773,693 414,110 21,365 338,218 56.3% 396,418 CASHIERING & COLLECTION 636,968 416,546 - 220,422 65.4% 431,760 LICENSES & PERMITS 766,641 658,662 11,107 96,872 87.4% 332,227 BUDGET MANAGEMENT 816,288 581,423 1 234,864 71.2% 519,009 ACCOUNTING 1,141,852 833,182 33,232 275,439 75.9% 685,474 PAYROLL 479,984 365,747 - 114,236 76.2% 360,207
ACCOUNTS PAYABLE 278,278 217,231 - 61,047 78.1% 199,185 CITY BILLING & CUSTOMER SERVICE 833,618 544,455 825 288,339 65.4% 507,119 PURCHASING 840,556 622,177 19 218,360 74.0% 625,389
CENTRAL WAREHOUSE 244,738 183,590 - 61,148 75.0% 175,373 MAIL SERVICES 163,466 116,614 11,665 35,187 78.5% 109,059 Total 7,302,891 5,202,074 89,006 2,011,812 72.5% 4,630,663 TOTAL GENERAL GOVERNMENT 23,484,690 15,420,751 972,687 7,091,252 69.8% 14,272,718

CITY OF SANTA BARBARA
General Fund
Interim Statement of Appropriations, Expenditures and Encumbrances For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

YTD
Expended
Revised YTD Encum- Remaining and Previous
Budget Actual brances Balance Encumbered YTD

CITY OF SANTA BARBARA
General Fund
Interim Statement of Appropriations, Expenditures and Encumbrances For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

PUBLIC SAFETY
Police
CHIEF'S STAFF 1,090,756 1,106,022 7,247 (22,513) 102.1% 1,321,356 BUSINESS OFFICE 675,625 442,106 2,728 230,790 65.8% 425,535 RECORDS BUREAU 2,142,109 1,244,334 1,191 896,584 58.1% 1,241,929 STRATEGIC OPERATIONS AND PERSONNEL 1,902,857 1,443,155 109,338 350,364 81.6% 1,451,509 PROPERTY ROOM 259,996 204,288 - 55,708 78.6% 160,277
TRAINING, RECRUITMENT AND WELLNESS 2,118,941 1,113,557 69,403 935,981 55.8% 1,144,162 RANGE AND EQUIPMENT 1,593,310 1,151,196 52,380 389,734 75.5% 1,143,330 COMMUNITY & MEDIA RELATIONS 290,304 111,113 - 179,191 38.3% 242,915 INFORMATION TECHNOLOGY/CRIME ANALYSIS 1,757,195 1,407,312 32,909 316,975 82.0% 1,351,488 CRIMINAL INVESTIGATIONS & INTERNAL OP'S 6,238,744 4,244,411 5,596 1,988,737 68.1% 3,920,393 CRIME LAB 170,298 117,680 - 52,618 69.1% 114,027
FIELD OPERATIONS DIVISION 23,352,842 15,970,648 31,066 7,351,129 68.5% 13,950,653 TRAFFIC 772,855 344,499 - 428,356 44.6% 837,445
SPECIAL EVENTS 627,643 548,005 544 79,094 87.4% 523,060 STREET CRIMES UNIT 2,731,971 1,070,733 (0) 1,661,238 39.2% 1,005,150 SPECIAL ENFORCEMENT TEAM 884,466 171,299 - 713,166 19.4% 631,669 PARKING AND STREET SWEEPING 397,555 304,061 - 93,494 76.5% 280,513 PARKING ENFORCEMENT 1,482,760 596,166 3,980 882,613 40.5% 633,321 COMBINED COMMUNICATIONS CENTER 3,140,937 2,596,488 6,661 537,788 82.9% 2,368,773 ANIMAL CONTROL 954,668 544,080 3,386 407,201 57.3% 541,997 Total 52,585,829 34,731,154 326,428 17,528,248 66.7% 33,289,502 Fire
ADMINISTRATION 1,322,186 970,194 101 351,891 73.4% 843,407 EMERGENCY SERVICES AND PUBLIC ED 578,117 355,682 - 222,435 61.5% 363,258 PREVENTION 1,598,680 975,719 525 622,437 61.1% 902,159
WILDLAND FIRE MITIGATION PROGRAM 726,937 284,786 7,321 434,829 40.2% 209,470 OPERATIONS 26,699,047 19,144,786 162,896 7,391,364 72.3% 19,429,062 TRAINING AND RECRUITMENT 887,072 611,408 - 275,665 68.9% 476,851 ARFF 3,105,504 2,436,531 - 668,973 78.5% 2,241,661
Total 34,917,542 24,779,105 170,843 9,967,593 71.5% 24,465,870 TOTAL PUBLIC SAFETY 87,503,371 59,510,259 497,271 27,495,841 68.6% 57,755,371

PUBLIC WORKS
Public Works
ADMINISTRATION 1,522,713 915,670 15,546 591,497 61.2% 931,175 ENGINEERING SVCS 7,039,564 4,478,640 38,032 2,522,892 64.2% 4,142,325 PUBLIC RT OF WAY MGMT 2,092,273 1,216,538 32,366 843,368 59.7% 1,143,773 ENVIRONMENTAL PROGRAMS 803,356 349,694 111,239 342,423 57.4% 477,112 Total 11,457,906 6,960,542 197,183 4,300,180 62.5% 6,694,384 TOTAL PUBLIC WORKS 11,457,906 6,960,542 197,183 4,300,180 62.5% 6,694,384

YTD
Expended
Revised YTD Encum- Remaining and Previous
Budget Actual brances Balance Encumbered YTD

CITY OF SANTA BARBARA
General Fund
Interim Statement of Appropriations, Expenditures and Encumbrances For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

COMMUNITY SERVICES
Parks & Recreation
REC PROGRAM MGMT 1,167,933 592,320 2,917 572,696 51.0% 490,191 FACILITIES & SPECIAL EVENTS 1,573,652 1,121,507 144,581 307,564 80.5% 905,000 YOUTH ACTIVITIES 1,631,330 1,007,322 10,011 613,997 62.4% 841,629 ACTIVE ADULTS 1,109,737 633,855 7,657 468,226 57.8% 587,260 AQUATICS 2,189,856 1,350,869 150,914 688,073 68.6% 1,338,781 SPORTS 801,188 472,388 127,731 201,069 74.9% 435,926
TENNIS 558,388 294,496 142,630 121,263 78.3% 268,807
NEIGHBORHOOD & OUTREACH SERV 1,235,466 823,324 8,298 403,845 67.3% 700,963 ADMINISTRATION 1,249,735 869,189 598 379,949 69.6% 780,794 PROJECT MANAGEMENT TEAM 752,712 491,180 29,619 231,912 69.2% 360,963 PARK OPERATIONS MANAGEMENT 1,041,411 761,331 13,156 266,923 74.4% 491,175 GROUNDS & FACILITIES MAINTENANCE 5,951,966 4,103,356 99,681 1,748,929 70.6% 3,800,688 FORESTRY 1,859,092 1,160,314 35,695 663,083 64.3% 991,565 BEACH MAINTENANCE 165,111 88,626 12,257 64,228 61.1% 100,159 MEDIANS PARKWAYS & CONTRACTS 582,447 347,602 71,561 163,284 72.0% 359,703 Total 21,870,024 14,117,676 857,308 6,895,041 68.5% 12,453,602 Library
ADMINISTRATION 932,821 650,006 51,823 230,992 75.2% 475,590 CENTRAL LIBRARY 5,946,744 3,819,657 46,196 2,080,891 65.0% 3,431,378 EASTSIDE LIBRARY 386,328 209,674 1,230 175,423 54.6% 231,354 LIBRARY ON THE GO 192,691 98,525 - 94,165 51.1% 78,112
ADULT EDUCATION 212,056 41,305 - 170,752 19.5% -
Total 7,670,640 4,819,167 99,250 2,752,223 64.1% 4,216,434 TOTAL COMMUNITY SERVICES 29,540,664 18,936,842 956,557 9,647,264 67.3% 16,670,036

COMMUNITY DEVELOPMENT
Community Development
ADMINISTRATION 2,024,906 1,477,873 25,770 521,263 74.3% 1,056,265 RENTAL HOUSING MEDIATION 321,113 237,490 - 83,623 74.0% 215,068 HUMAN SERVICES 862,824 501,835 321,245 39,745 95.4% 540,344 LONG RANGE PLAN & SPEC STUDY 995,328 656,528 557 338,242 66.0% 728,835 DEVEL & ENVIRONMENTAL REVIEW 1,736,654 1,148,662 6,357 581,634 66.5% 1,130,404 ZONING INFO & ENFORCEMENT 1,744,050 959,431 14,021 770,598 55.8% 1,009,914 DESIGN REV & HIST PRESERVATION 1,582,720 1,022,840 4,546 555,334 64.9% 1,072,245 BLDG INSP & CODE ENFORCEMENT 1,776,300 1,091,312 12,543 672,445 62.1% 1,272,160 RECORDS ARCHIVES & CLER SVCS 797,593 497,406 30,286 269,901 66.2% 485,807 BLDG COUNTER & PLAN REV SVCS 3,046,010 1,772,586 62,384 1,211,040 60.2% 1,489,736 CODE COMPLIANCE 771,758 404,273 168 367,317 52.4% -
Total 15,659,256 9,770,236 477,878 5,411,142 65.4% 9,000,778 TOTAL COMMUNITY DEVELOPMENT 15,659,256 9,770,236 477,878 5,411,142 65.4% 9,000,778

YTD
Expended
Revised YTD Encum- Remaining and Previous
Budget Actual brances Balance Encumbered YTD

CITY OF SANTA BARBARA
General Fund
Interim Statement of Appropriations, Expenditures and Encumbrances For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

SUSTAINABILITY AND RESILIENCE
Sustainability and Resilience
ADMINISTRATION 75,245 24,187 52,034 (976) 101.3% 54,125 Total 75,245 24,187 52,034 (976) 101.3% 54,125
TOTAL SUSTAINABILITY AND RESILIENCE 75,245 24,187 52,034 (976) 101.3% 54,125

NON-DEPARTMENTAL
Non-Departmental
ANTICIPATED SALARY SAVINGS (4,420,842) - - (4,420,842) 0.0% - TRANSFERS OUT 8,233,743 4,644,057 - 3,589,686 56.4% 2,530,802 CAPITAL OUTLAY TRANSFER 29,437,026 22,077,769 - 7,359,257 75.0% 19,240,064 APPROP. RESERVE 144,250 - - 144,250 0.0% -
Total 33,394,177 26,721,827 - 6,672,350 80.0% 21,770,865 TOTAL NON-DEPARTMENTAL 33,394,177 26,721,827 - 6,672,350 80.0% 21,770,865 TOTAL EXPENDITURES 201,115,309 137,344,645 3,153,610 60,617,053 69.9% 126,218,277 ** The legal level of budgetary control is at the department level for the General Fund. Therefore, as long as the department as a whole is within budget, budgetary compliance has been achieved. The City actively monitors the budget status of each department and takes measures to address potential over budget situations before they occur.

For Enterprise and Internal Service Funds, the level of budgetary control is at the fund level. The City also monitors and addresses these fund types for potential over budget situations.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

TRAFFIC SAFETY FUND
Revenue 245,000 168,097 - 76,903 68.6% 147,815
Expenditures 245,000 168,097 - 76,903 68.6% 147,815
Revenue Less Expenditures - - - - -

CREEK RESTORATION/WATER QUALITY IMPRVMT
Revenue 4,845,513 4,202,325 - 643,188 86.7% 3,942,244
Expenditures 5,259,427 3,128,413 539,138 1,591,875 69.7% 2,605,071 Revenue Less Expenditures (413,914) 1,073,912 (539,138) (948,688) 1,337,173

COMMUNITY DEVELOPMENT BLOCK GRANT
Revenue 1,846,634 265,305 - 1,581,329 14.4% 733,954
Expenditures 2,448,829 769,201 1,209,767 469,861 80.8% 880,273 Revenue Less Expenditures (602,195) (503,896) (1,209,767) 1,111,468 (146,320)

COUNTY LIBRARY
Revenue 446,729 366,512 - 80,216 82.0% 392,869
Expenditures 499,544 309,596 6,176 183,772 63.2% 674,453 Revenue Less Expenditures (52,816) 56,917 (6,176) (103,556) (281,584)

STREETS FUND
Revenue 13,178,081 10,074,598 - 3,103,483 76.4% 9,226,428 Expenditures 13,326,601 9,216,527 178,667 3,931,407 70.5% 8,708,219 Revenue Less Expenditures (148,520) 858,071 (178,667) (827,924) 518,209

MEASURE A FUND
Revenue 5,045,484 3,835,359 - 1,210,125 76.0% 3,564,377 Expenditures 5,059,908 3,120,325 214,253 1,725,330 65.9% 2,795,205 Revenue Less Expenditures (14,424) 715,034 (214,253) (515,205) 769,172

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
Special Revenue Funds
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service charges 33,716,747 25,223,604 - 8,493,143 74.8% 24,026,111 Other Fees & Charges 70,000 28,141 - 41,859 40.2% 901,639 Investment Income 44,500 86,151 - (41,651) 193.6% 26,905 Grants 155,450 155,450 - - 100.0% 23,211
Miscellaneous 286,223 309,394 - (23,171) 108.1% (4,036) TOTAL REVENUES 34,272,920 25,802,740 - 8,470,180 75.3% 24,973,830

EXPENSES
Salaries & Benefits 1,813,767 1,083,067 - 730,699 59.7% 1,064,365 Materials, Supplies & Services 31,344,278 22,277,070 470,954 8,596,254 72.6% 20,117,445 Special Projects 1,366,410 437,725 295,593 633,092 53.7% 93,714 Transfers-Out 50,000 37,500 - 12,500 75.0% 37,500
Capital Outlay Transfers 973 730 - 243 75.0% 1,460
Equipment 394,960 79,613 158,195 157,152 60.2% 17,206
Other 40,000 - - 40,000 0.0% -
Appropriated Reserve 22,420 - - 22,420 0.0% -
TOTAL EXPENSES 35,032,808 23,915,706 924,742 10,192,360 70.9% 21,331,690 Revenue Less Expense (759,888) 1,887,034 (924,742) (1,722,180) 3,642,140

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

SOLID WASTE FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Water Sales- Metered 60,197,486 43,863,281 - 16,334,205 72.9% 43,744,943 Service Charges 208,765 206,107 - 2,658 98.7% 221,799
Cater JPA Treatment Charges 2,359,556 1,390,060 - 969,496 58.9% 1,485,554 Investment Income 901,175 1,371,288 - (470,113) 152.2% 535,396 Grants - - - - 0.0% 710,798
Reimbursements 6,759,704 4,782,135 - 1,977,569 70.7% 2,699,609 Miscellaneous 66,128 290,588 - (224,460) 439.4% 762,269 Operating Transfers-In - - - - 0.0% 135,943
TOTAL REVENUES 70,492,814 51,903,459 - 18,589,355 73.6% 50,296,311

EXPENSES
Salaries & Benefits 13,981,945 9,426,020 - 4,555,925 67.4% 8,751,023 Materials, Supplies & Services 20,973,691 12,471,867 4,569,597 3,932,227 81.3% 10,495,704 Special Projects 803,622 383,093 195,469 225,060 72.0% 272,923 Water Purchases 11,084,565 6,388,287 - 4,696,278 57.6% 6,808,946 Debt Service 9,221,536 5,667,661 - 3,553,875 61.5% 5,639,668 Capital Outlay Transfers 15,167,186 11,647,139 - 3,520,047 76.8% 15,668,303 Equipment 247,606 61,262 16,875 169,469 31.6% 79,681
Capitalized Fixed Assets 290,275 114,711 41,316 134,249 53.8% 138,583 Other 33,800 35,148 - (1,348) 104.0% 32,080
Appropriated Reserve 150,000 - - 150,000 0.0% -
TOTAL EXPENSES 71,954,226 46,195,188 4,823,257 20,935,781 70.9% 47,886,910 Revenue Less Expense (1,461,412) 5,708,271 (4,823,257) (2,346,427) 2,409,401 NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

WATER OPERATING FUND
from the operating fund is shown in the Capital Transfers.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service Charges 26,609,956 19,386,943 - 7,223,013 72.9% 18,502,808 Fees 584,826 477,947 - 106,879 81.7% 348,581
Investment Income 180,700 260,605 - (79,905) 144.2% 107,143 Rents & Concessions 61,072 36,752 - 24,321 60.2% 42,786 Miscellaneous 5,000 3,179 - 1,821 63.6% 26,437
TOTAL REVENUES 27,441,554 20,165,426 - 7,276,128 73.5% 19,027,755

EXPENSES
Salaries & Benefits 8,562,134 6,053,582 - 2,508,552 70.7% 5,499,388 Materials, Supplies & Services 10,216,367 6,579,870 1,151,583 2,484,914 75.7% 6,205,265 Special Projects 915,550 264,942 41,575 609,033 33.5% 244,224 Debt Service 3,551,087 2,532,187 - 1,018,900 71.3% 2,553,312 Capital Outlay Transfers 4,743,055 3,557,291 - 1,185,764 75.0% 3,704,880 Equipment 128,500 38,451 17,025 73,024 43.2% 76,911
Capitalized Fixed Assets 122,246 55,810 - 66,436 45.7% 71,849 Other 4,000 1,513 1,500 988 75.3% 1,985
TOTAL EXPENSES 28,242,939 19,083,646 1,211,683 7,947,610 71.9% 18,357,815 Revenue Less Expense (801,385) 1,081,780 (1,211,683) (671,482) 669,940 NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

WASTEWATER OPERATING FUND
from the operating fund is shown in the Capital Transfers.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Improvement Tax 900,000 818,829 - 81,171 91.0% 730,834
Parking Fees 8,283,728 5,708,567 - 2,575,161 68.9% 3,366,721 Other Fees & Charges 30,000 11,260 - 18,740 37.5% 24,108 Investment Income 37,400 58,374 - (20,974) 156.1% 22,015 Rents & Concessions 157,760 193,508 - (35,748) 122.7% 118,340 Miscellaneous 144,366 69,859 - 74,507 48.4% 226,221
Operating Transfers-In 1,063,743 535,307 - 528,436 50.3% 548,771 TOTAL REVENUES 10,616,997 7,395,703 - 3,221,294 69.7% 5,037,010

EXPENSES
Salaries & Benefits 5,255,213 3,627,005 - 1,628,207 69.0% 2,941,395 Materials, Supplies & Services 4,277,069 3,072,266 571,194 633,609 85.2% 2,368,059 Special Projects 439,362 140,746 273,673 24,943 94.3% 299,721 Capital Outlay Transfers 721,087 540,815 - 180,272 75.0% 169,819 Equipment 47,165 5,153 - 42,012 10.9% 2,921
Appropriated Reserve 10,000 - - 10,000 0.0% -
TOTAL EXPENSES 10,749,896 7,385,986 844,868 2,519,043 76.6% 5,781,915 Revenue Less Expense (132,899) 9,718 (844,868) 702,251 (744,905) NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

DOWNTOWN PARKING FUND
from the operating fund is shown in the Capital Transfers.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Leases-Commercial/Industrial 5,607,214 3,369,080 - 2,238,134 60.1% 3,867,391 Leases-Terminal 9,757,487 7,443,185 - 2,314,302 76.3% 6,132,478 Leases-Non-Commercial Aviation 4,658,247 3,228,163 - 1,430,084 69.3% 3,682,971 Leases-Commercial Aviation 6,374,208 4,273,643 - 2,100,565 67.0% 3,696,983 Investment Income 200,500 333,218 - (132,718) 166.2% 123,140 Grants 437,036 - - 437,036 0.0% 5,907,498
Service Charges - 1,411 - (1,411) 100.0% 960
Miscellaneous 150,459 101,492 - 48,967 67.5% 105,143
Operating Transfers-In - - - - 0.0% 125,117
TOTAL REVENUES 27,185,151 18,750,192 - 8,434,959 69.0% 23,641,680

EXPENSES
Salaries & Benefits 10,276,693 7,217,604 - 3,059,089 70.2% 6,362,269 Materials, Supplies & Services 13,203,172 8,423,478 1,708,488 3,071,206 76.7% 7,314,271 Special Projects 2,790,947 488,114 938,353 1,364,480 51.1% 579,080 Transfer-Out 250,000 187,500 - 62,500 75.0% -
Debt Service 1,551,750 1,163,813 - 387,938 75.0% 1,166,812 Capital Outlay Transfers 2,055,016 1,014,413 - 1,040,603 49.4% 3,214,966 Equipment 253,990 53,074 37,669 163,247 35.7% 101,754
Appropriated Reserve 131,556 - - 131,556 0.0% -
TOTAL EXPENSES 30,513,124 18,547,996 2,684,510 9,280,619 69.6% 18,739,152 Revenue Less Expense (3,327,973) 202,196 (2,684,510) (845,660) 4,902,529 NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

AIRPORT OPERATING FUND
from the operating fund is shown in the Capital Transfers.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Fees & Card Sales 3,857,737 2,734,320 - 1,123,417 70.9% 2,713,879 Investment Income 22,500 41,073 - (18,573) 182.5% 13,559 Rents & Concessions 162,252 162,238 - 14 100.0% 133,520 Miscellaneous - 607 - (607) 100.0% (862)
TOTAL REVENUES 4,042,489 2,938,237 - 1,104,252 72.7% 2,860,096

EXPENSES
Salaries & Benefits 87,333 62,375 - 24,958 71.4% 58,187 Materials, Supplies & Services 3,142,645 1,944,801 1,129,957 67,888 97.8% 1,844,423 Debt Service 41,430 - - 41,430 0.0% -
Capital Outlay Transfers 228,000 171,000 - 57,000 75.0% 157,977 Equipment 250 163 - 87 65.3% -
TOTAL EXPENSES 3,499,658 2,178,339 1,129,957 191,362 94.5% 2,060,587 Revenue Less Expense 542,831 759,898 (1,129,957) 912,889 799,509 NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution from the operating fund is shown in the Capital Transfers.

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

GOLF COURSE FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service Charges 3,355,887 2,516,916 - 838,971 75.0% 2,315,932 Work Orders - Bldg Maint. 3,608,512 2,627,321 - 981,191 72.8% 2,425,107 Miscellaneous 10,500 89 - 10,411 0.8% 1,602
Operating Transfers-In 150,000 - - 150,000 0.0% -
TOTAL REVENUES 7,124,899 5,144,326 - 1,980,573 72.2% 4,742,640

EXPENSES
Salaries & Benefits 4,629,735 3,179,969 - 1,449,766 68.7% 2,850,404 Materials, Supplies & Services 2,070,928 1,481,394 171,846 417,687 79.8% 1,373,849 Special Projects 287,955 249,093 46,282 (7,421) 102.6% 195,512 Capital Outlay Transfers 193,598 145,198 - 48,400 75.0% 357,899 Equipment 10,000 5,772 - 4,228 57.7% 4,001
Appropriated Reserve 85,065 - - 85,065 0.0% -
TOTAL EXPENSES 7,277,281 5,061,427 218,129 1,997,725 72.5% 4,781,665 Revenue Less Expense (152,382) 82,898 (218,129) (17,152) (39,025)

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

FACILITIES MANAGEMENT FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Vehicle Rental Charges 3,182,866 2,226,248 - 956,618 69.9% 2,265,358 Investment Income 204,248 222,790 - (18,542) 109.1% 95,841 Rents & Concessions 107,553 77,380 - 30,173 71.9% 89,701 Miscellaneous 68,000 164,537 - (96,537) 242.0% 82,232
Operating Transfers-In 222,649 23,871 - 198,778 10.7% 29,000 TOTAL REVENUES 3,785,316 2,714,825 - 1,070,491 71.7% 2,562,132

EXPENSES
Salaries & Benefits 231,260 134,314 - 96,946 58.1% 136,663 Materials, Supplies & Services 21,038 3,630 - 17,408 17.3% 17,590 Debt Service 606,371 303,186 104,408 198,778 67.2% -
Capital Outlay Transfers - - - - 0.0% 797,585
Capitalized Fixed Assets 3,310,615 601,224 1,481,215 1,228,175 62.9% 1,333,811 TOTAL EXPENSES 4,169,284 1,042,354 1,585,623 1,541,308 63.0% 2,285,649 Revenue Less Expense (383,968) 1,672,471 (1,585,623) (470,817) 276,483

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

FLEET REPLACEMENT FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Vehicle Maintenance Charges 3,161,802 2,355,014 - 806,788 74.5% 2,183,841 Reimbursements 5,000 3,750 - 1,250 75.0% 3,750
Miscellaneous 60,000 70,531 - (10,531) 117.6% 54,851
TOTAL REVENUES 3,226,802 2,429,295 - 797,507 75.3% 2,242,442

EXPENSES
Salaries & Benefits 1,698,636 1,136,019 - 562,617 66.9% 1,078,644 Materials, Supplies & Services 1,463,788 1,035,872 230,709 197,207 86.5% 1,044,053 Special Projects 64,994 25,964 42,613 (3,584) 105.5% 57,159 Capital Outlay Transfers 1,467 1,100 - 367 75.0% 31,201 Equipment 7,884 1,151 - 6,733 14.6% 7,446
Capitalized Fixed Assets 30,275 - 30,275 - 100.0% 16,213 Appropriated Reserve 15,000 - - 15,000 0.0% -
TOTAL EXPENSES 3,282,043 2,200,106 303,597 778,341 76.3% 2,234,715 Revenue Less Expense (55,241) 229,189 (303,597) 19,166 7,726

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

FLEET MAINTENANCE FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Insurance Premiums 7,658,599 5,743,949 - 1,914,650 75.0% 3,792,596 Workers' Compensation Premiums 4,572,008 3,426,944 - 1,145,065 75.0% 3,123,075 OSH Charges 292,974 219,731 - 73,244 75.0% 217,673
Unemployment Insurance Premium 427,559 307,699 - 119,860 72.0% 208,147 Investment Income 40,800 26,186 - 14,614 64.2% 25,309
Miscellaneous - - - - 0.0% 3,859
Operating Transfers-In 4,075,825 4,056,869 - 18,956 99.5% 488,369 TOTAL REVENUES 17,067,765 13,781,377 - 3,286,388 80.7% 7,859,027

EXPENSES
Salaries & Benefits 928,263 607,550 - 320,713 65.5% 575,171 Materials, Supplies & Services 13,272,541 9,478,465 355,227 3,438,849 74.1% 7,807,496 Capital Outlay Transfers 409 307 - 102 75.0% 614
Equipment - 479 - (479) 100.0% -
TOTAL EXPENSES 14,201,213 10,086,801 355,227 3,759,185 73.5% 8,383,280 Revenue Less Expense 2,866,552 3,694,576 (355,227) (472,796) (524,253) The Self Insurance Trust Fund is an internal service fund of the City, which accounts for the cost of providing workers' compensation, property and liability insurance as well as unemployment insurance and certain self-insured employee benefits on a city-wide basis. Internal Service Funds charge other funds for the cost of providing their specific services.

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

SELF INSURANCE TRUST FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service charges 5,261,982 3,805,393 - 1,456,589 72.3% 3,364,487 Operating Transfers-In - - - - 0.0% 35,000
TOTAL REVENUES 5,261,982 3,805,393 - 1,456,589 72.3% 3,399,487

EXPENSES
Salaries & Benefits 3,420,556 2,133,525 - 1,287,031 62.4% 1,860,048 Materials, Supplies & Services 1,918,280 1,649,504 50,493 218,282 88.6% 1,479,803 Special Projects 200 632 - (432) 316.0% 9,382
Capital Outlay Transfers 131,677 103,758 - 27,919 78.8% 186,595 Equipment 12,640 16,147 324 (3,831) 130.3% 5,749
TOTAL EXPENSES 5,483,353 3,903,566 50,817 1,528,969 72.1% 3,541,577 Revenue Less Expense (221,371) (98,173) (50,817) (72,380) (142,090) NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution from the operating fund is shown in the Capital Transfers.

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

INFORMATION TECHNOLOGY FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Leases - Commercial 2,000,000 1,733,886 - 266,114 86.7% 1,674,117 Leases - Food Service 3,100,000 2,705,126 - 394,874 87.3% 2,606,723 Slip Rental Fees 5,070,940 3,884,385 - 1,186,555 76.6% 3,676,273 Visitors Fees 750,000 553,935 - 196,065 73.9% 606,162
Slip Transfer Fees 1,100,000 890,775 - 209,225 81.0% 1,168,300 Parking Revenue 3,254,325 2,728,551 - 525,774 83.8% 2,422,180 Wharf Parking 220,000 208,764 - 11,236 94.9% 203,524
Grants - 12,752 - (12,752) 100.0% 12,752
Other Fees & Charges 252,630 189,048 - 63,583 74.8% 188,731 Investment Income 112,700 180,921 - (68,221) 160.5% 78,550 Rents & Concessions 392,316 343,869 - 48,448 87.7% 320,631 Miscellaneous 783,220 630,755 - 152,465 80.5% 249,821
TOTAL REVENUES 17,036,131 14,062,765 - 2,973,366 82.5% 13,207,764

EXPENSES
Salaries & Benefits 8,297,772 5,673,172 - 2,624,599 68.4% 5,522,466 Materials, Supplies & Services 6,062,350 3,944,973 863,499 1,253,878 79.3% 3,451,735 Special Projects 296,875 147,389 57,750 91,736 69.1% 116,851 Debt Service 2,036,965 2,036,965 - (0) 100.0% 2,038,500 Capital Outlay Transfers 2,250,000 1,500,000 - 750,000 66.7% 409,498 Equipment 147,075 32,198 1,873 113,003 23.2% 30,084
Capitalized Fixed Assets 83,840 - 36,643 47,197 43.7% - Other 2,375 1,513 - 863 63.7% 2,513
Appropriated Reserve 100,000 - - 100,000 0.0% -
TOTAL EXPENSES 19,277,251 13,336,210 959,765 4,981,276 74.2% 11,571,647 Revenue Less Expense (2,241,119) 726,555 (959,765) (2,007,910) 1,636,116

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

WATERFRONT OPERATING FUND
NOTE - These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution from the operating fund is shown in the Capital Transfers.

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service Charges 34,000,000 24,966,910 - 9,033,090 73.4% 3,580,111 Investment Income - - - - 0.0% (74)
Operating Transfers-In - - - - 0.0% 1,550,532
TOTAL REVENUES 34,000,000 24,966,910 - 9,033,090 73.4% 5,130,569

EXPENSES
Salaries & Benefits 177,610 130,137 - 47,472 73.3% 105,529 Materials, Supplies & Services 31,880,601 24,279,267 1,205,029 6,396,305 79.9% 4,457,839 Special Projects 1,110,847 761,931 38,837 310,079 72.1% 481,951 Other 311,368 - - 311,368 0.0% -
TOTAL EXPENSES 33,480,425 25,171,335 1,243,866 7,065,224 78.9% 5,045,319 Revenue Less Expense 519,575 (204,425) (1,243,866) 1,967,866 85,250

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

SANTA BARBARA CLEAN ENERGY FUND

Revised YTD Encum- Remaining Percent of Previous
Budget Actual brances Balance Budget YTD

REVENUES
Service charges 2,552,568 1,914,426 - 638,142 75.0% 1,776,803 Grants 93,600 78,600 - 15,000 84.0% 169,601
Miscellaneous - 5,000 - (5,000) 100.0% 1
TOTAL REVENUES 2,646,168 1,998,026 - 648,142 75.5% 1,946,404

EXPENSES
Salaries & Benefits 812,036 467,373 - 344,663 57.6% 373,264 Materials, Supplies & Services 2,024,878 1,131,424 152,644 740,810 63.4% 891,400 Special Projects 167,778 6,245 51,744 109,789 34.6% 9,402 Debt Service 24,140 18,105 - 6,035 75.0% 18,105
Capital Outlay Transfers 435 326 - 109 75.0% 75,652
Equipment 9,471 10,982 716 (2,227) 123.5% -
Capitalized Fixed Assets 78,600 78,600 - - 100.0% -
TOTAL EXPENSES 3,117,338 1,713,056 205,104 1,199,178 61.5% 1,367,824 Revenue Less Expense (471,170) 284,971 (205,104) (551,036) 578,580 NOTE-These figures reflect the operating fund only. Though the capital fund is excluded, the current year contribution from the operating fund is shown in the Capital Transfers.

CITY OF SANTA BARBARA
Interim Statement of Revenues and Expenditures
For Nine Months Ended March 31, 2023 (75% of Fiscal Year)

ENERGY AND CLIMATE MANAGEMENT FUND

Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 1 General Fund Revenues
The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Summary of Revenues, General Fund table below reports preliminary General Fund revenues for nine months ending March 31, 2023, in Fiscal Year (FY) 2023. For interim financial statement purposes, revenues are reported on a cash basis (i.e., when funds are received). All revenues below have unique collection cycles, therefore may vary from other revenues and result in fluctuations when comparing historical actuals. This table highlights the annual revised budget, projected end-of-year actuals, and actual collections for general tax revenues, franchise fees, and other fees/charges.

Summary of Revenues, General Fund
Property Tax
In 1978, a State constitutional amendment (Article XIIIA) provided that the ad valorem real property tax rate be limited to 1% of market value and be levied only by the county and shared with all other jurisdictions. The County of Santa Barbara collects the property taxes and distributes them to taxing jurisdictions because of the taxing jurisdictions’ assessed valuations, subject to adjustments for voter approved debt. Property taxes are formally due on November 1 and February 1 and become delinquent as of December 10 and April 10, respectively. Taxes become a lien on the property effective March 1 of the preceding year.

As of March 31, 2023, approximately $24.3 Million in property tax revenues were received. During the budget setting process, 2.5% growth was anticipated in FY 2023 when comparing the previous year’s actuals. Actual revenues for this year are now trending to be $1.2 Million above budget. To ATTACHMENT 2
Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 2 note, Proposition 13 impacts the amount of property tax collected as it limits how much the taxable value of a property can rise every year. This property assessment occurs in January for the subsequent year at a restricted rate of 2% or Consumer Price Index (CPI), whichever is lessor.

Prior to FY 2022, this increase was 2% for several years. CPI in FY 2022 was 1.016% but returned to 2% in FY 2023.

Sales Taxes
Sales and use tax revenue, collected on a cash basis through March 31, 2023, is approximately $22.1 Million. Positive sales tax trends have been observed, likely due to a combination of increased consumer spending (particularly in online and auto sales) and higher than expected inflation. Sales tax, currently received, is 8% higher than forecasted at this point in the year and is trending to continue to exceed budgeted revenues for the remainder of FY 2023. Staff continue to monitor this revenue source closely and will evaluate a revised projection as remittances are received in preparation for the Quarter Four (Q4) report.

Measure C Sales Tax
On November 7, 2017, a 1% general sales tax measure (Measure C) was approved, with significant community support for infrastructure needs, which will generate the necessary funds required to improve the citywide PCI rating. Measure C sales tax revenue received at the end of Third Quarter (Q3) is approximately $23.7 Million on a cash basis, which is roughly 9% higher than expected. Staff will continue to monitor tax remittances received and may consider adjusting the FY 2023 projection at the end of Q4, as revenues will likely exceed the budget. Additional Measure C revenue will be programmed to support capital projects in future budget cycles.

Transient Occupancy Tax
Transient Occupancy Tax (TOT) revenue at Q3 is approximately $20.1 Million, which is significantly higher than collections in FY 2021 and FY 2022 because of COVID-19 impacts on the travel industry. There is a higher demand for rooms now that travel has picked up, however, the main cause of the growth is related to increases in average daily rates, which are 30%-40% higher than FY 2019 (pre-pandemic rates). TOT revenues are 10% higher than budget anticipated at the end of Q3, and it is likely that revenues will exceed budget at the end of FY 2023. Staff will continue to monitor this revenue source closely and will evaluate a revised projection as additional tax remittances are received in preparation for the Q4 report.

Department and Other Revenues
Cannabis tax revenues have seen a moderate decline (24%) primarily attributable to one Cannabis business, due to consolidation of operations and reduced sales in FY23 compared to FY22.

Various General Fund departments throughout the City generate revenue. These revenue sources have a revised budget of approximately $33.8 Million. Revenues from departments are comprised of various categories in the Summary of Revenues, General Fund table above, but for transparency purposes these variances are broken out by department in the Summary of Departmental Revenues, General Fund table below.

Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 3 Summary of Departmental Revenues, General Fund
General Fund Expenditures
The Summary of Departmental Expenditures, General Fund table below summarizes General Fund year-to-date expenditures through March 31, 2023, compared to revised budget, and projected end-of-year actuals. The Revised Budget column represents the adopted budget, appropriation carryovers from the prior year, and all supplemental appropriations approved by the City Council in the current year. Encumbrances as of March 31, 2023, are shown separately from expense actuals as the inclusion of encumbrances within actuals can distort trends. The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations.

Encumbrances still open at year-end are not accounted for as expenditures and liabilities but rather, as restricted or committed governmental fund balance.

The FY 2023 adopted budget included several targeted reduction plans to assist with lowering City expenditures. A balancing strategy of $1.0 Million was allocated across General Fund departments, including general reductions and salary-saving measures. Most departments have met or exceeded their goal. Staff remain confident that expenditures will align with or be below budget at end of year, and that reduction goals will be met.

Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 4 Summary of Departmental Expenditures, General Fund
Summary of Departmental Expenditures by Character Code, General Fund Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 5 Expenditure Analysis by General Fund
The General Fund revised budget of $201.1 Million, which includes $7.9 Million in carried forward appropriations and encumbrances and any FY 2023 council approved amendments, is 68% exhausted ($137.3 Million) as of March 31, 2023. The Summary of Departmental Expenditures, General Fund table above shows performance at department level. 43.5% of the total budget, including Non-Departmental Expenditures, is appropriated to provide public safety services through the Police and Fire Departments. Community Services comprises 14.7% of the total budget, which includes the City’s Parks and Recreation and Library Departments. General Government makes up

11.7% of appropriations which includes Finance, City Administration, Mayor & Council, City Attorney, Human Resources, and City Clerk departments.

General Government actual spending of approximately $15.4 Million, represents 66% of its associated annual budget through Q3. In the Human Resources Department, savings are largely due to the pending Classification and Compensation Study that was approved by City Council on April 11, 2023, and is now at the beginning stages for expenditures. The Finance Department and City Administrator’s Office are trending to align with budget.

Public Safety actual spending of approximately $59.5 Million, represents 68% of associated annual budget. Lower expense trends are mainly related to staffing shortages through Q3 of FY 2023.

The Police Department (PD) expended $34.7 Million (66%) of its budget. PD has been challenged with on-going staffing shortages, including 25 sworn positions and 22 professional positions. There are also three officers on long term disability due to injury on duty. Some relief will be seen once the five people in the April academy graduate in October 2023. Staff continue to manage schedule and staffing needs to ensure appropriate coverage for the City. Two open officer positions supported expenditure reduction targets, other savings achieved through staffing shortages will be used to purchase new body worn cameras and tasers. Additional discussions between the Police Chief and the City Administrator regarding staffing and equipment needs will continue to occur and adjustments will be proposed accordingly. PD is currently projecting $2.4 Million in savings within their expenditure budget, which includes the purchase of $1.3 Million in equipment and providing $190,000 in financial support to the Street Sweeping program. Some expenditure savings are related to special projects that have not materialized but may as activities generally occur end of year. There are ARPA funds available for homeless services/co-response program and an additional co-response team will be created when the County establishes their second team. The goal is to activate the second team in the Spring.

The Fire Department (FD) expended $24.8 Million, using 71% of its budget. Most operational costs are tracking at or below expected levels. Minimum staffing overtime will continue to exceed budget due to six vacancies and four operational personnel positions that require coverage due to injury leave. If the overtime trend continues as it has for nine months of FY 2023, budget in this category will be exceeded by approximately $979,000. An additional overtime impact is related to the Fair Labor Standards Act (FLSA), as it is underfunded (by $136,000) for the second year in a row. Vegetation Management will require a roll-over of approximately $265,000 to FY 2024 to maximize the impact of the funding. These funds will be used to supplement a grant awarded by the Coastal Conservancy.

Community Services had actual expenditures of $18.9 Million, or 64% of associated budget.

Savings is anticipated based on this performance trend.

Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 6 The Library Department spent $4.8 Million, or 63% of its annual budget through Q3 FY 2023.

The Library continues to be open at reduced hours post-COVID and has limited access to the public at Central Library due to construction. While most of the Lower, Main, and Upper Levels are now open in Q4, this reduced access had significant impacts on user fees and service charges due to the construction projects taking longer than expected. The Library has started selling Merchandise, which will provide additional revenue. The main source of revenue loss projected is from donations: most of the donations received by the Library are restricted rather than for general use. The Central Library construction has also impacted revenue at the Eastside Library, as Central Library staff are using space at the Eastside Library that would normally be rentable space. Despite these challenges, the Library has continued to deliver materials and services through various means, including in-person, virtually, and through the Library on the Go Van, which provides offsite convenient services. Savings in the General Fund for Q3 are due to multiple unexpected vacancies, which are expected to be filled by year end. Required reductions have been met through holding a full-time position vacant.

Parks and Recreation (P&R) Department had Q3 expenditures of $14.1 Million (65% of its annual budget). Following years of drought, the City experienced heavy rain and windy weather conditions throughout the months of January, February, and March 2023. The winter storm of January 9 impacted the P&R Department and its services significantly, as it flooded the Municipal Tennis Center parking lot, courts, and building, and the Bath Street Pocket Park; washed a significant amount of debris onto City beaches; washed away 12 East Beach Volleyball Courts; damaged Parma, Rattlesnake, Cold Spring, and Tunnel Trails; created a small landslide onto the Thousand Steps beach access; and resulted in mudslides at Franceschi Park. Many trees were also damaged, including 54 street and park trees. While some of the damage such as the Municipal Tennis Center building are being addressed through allocated facility costs, the remaining impacts have been absorbed by the General Fund.

Due to several permanent positions held vacant in Q1, P&R achieved FY 2023 required budget reduction targets (1% of expenditure budget), additionally a large portion of savings is due to the reduction in non-contractual services related to the Trapeze Camp and other programs. An important thing to note is that most Recreation programs are pay to play, therefore any revenue shortfall is generally offset by expenditure savings. The Department continues to provide essential services, such as park maintenance to ensure that the community has access to safe and clean open spaces, food distribution and senior meal programs, recreation programming, camps, and affordable activities for youth and adults. Aside from core functions, the P&R Department continues to advance key capital infrastructure planning, design, and construction to ensure safe and accessible conditions.

The Public Works Department (PWD) had expenditures of $7.0 Million, or 61% of its annual budget for FY 2023. Engineering and Land Development vacancies contribute to the large expenditure shortfall in Q3, with some savings due to position turnovers in Administration.

Discretionary spending is being kept at a minimum (use of in-house resources, and through supply reductions), and there is savings from lower than anticipated costs in both Supplies and Services and Special Projects (including environmental compliance for lower abatement needs).

Revenues and expenditures will continue to be closely monitored and staff will provide an update at Q4 of any significant issues if they arise.

The Sustainability & Resilience (S&R) Department had expenditures of $24,187 related to the CalRecycle program that is solely grant funded. The CalRecycle program’s mission is to protect California’s environment and climate for the health and prosperity of future generations through the reduction, reuse and recycling of California resources, environmental education, disaster Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 7 recovery, and the transition from a disposable to a fully circular economy.

The Community Development Department (CDD) had expenditures of $9.8 Million or 62% of its annual budget. If you include encumbrances totaling $477,878 for professional services agreements related to plan checks, building inspections, municipal code codification services, and Human Service Grant Awards, the percentage of funds used is 65%; all encumbrances are expected to be fully exhausted this year. There are significant savings in Salary and Benefits due to the high number of vacancies that the department is actively recruiting for, many of which have now been filled. The department has experienced a high employee attrition rate during the past couple of years. CDD anticipates reaching a healthy 6-8% vacancy rate later this year. If the recommended transfer of $824K to Fund 1030 is approved, the anticipated expenditure savings for CDD would be reduced from $1.2 Million to $375K.

Non-Departmental expenditures include transfers from the General Fund to other funds. Majority of transfers occurring are to the Measure C fund which supports various capital maintenance and improvement projects. Anticipated year-end attrition savings are also recorded here, which helps balance variances achieved. Prior quarter, a transfer of $4.0 Million from the General Fund into the Self-Insurance fund (SIF) was adopted to address the growing underfunded reserves in the SIF. The actuarial recommended reserve level in the SIF grew from $18.3 Million in FY 2022 to $24.4 Million in FY 2023 – a $6.1 Million increase. The additional allocations into the SIF in FY 2023 and planned for FY 2024 and beyond are not adequate to bring reserves up to the actuarial recommended level; therefore, staff will consider transferring additional General Fund resources, as available, into the SIF which is in line with Council’s prior direction to allocate additional resources to address the underfunded position, in future budget cycles.

General Fund Reserves Projection
The General Fund, Fund Balance table below summarizes reserve projections for FY 2023, compared to actual reserves from prior years. General Fund has two reserve targets, Disaster Reserves and Contingency Reserves.

General Fund Reserves, Balance Summary
The Disaster Reserve is restricted to use in addressing the financial impacts of natural disasters, such as storms, floods, wildfires, droughts, tsunamis, earthquakes, and any other event that results in significant damage to City facilities and infrastructure or a significant reduction of normal operating revenues. The amount of the required Disaster Reserve is calculated based on 15% of the most recently adopted fiscal year operating expenditure budget.

FY2019 FY2020 FY2021 FY2022 FY2023 FY23 v FY22
Actual Actual Actual Actual
Projected at
Q3
Projected
Change in
Reserve
Contingency Reserve Target 10% $13,910,966 $13,799,412 $14,255,661 $15,650,447 $16,862,261 $1,211,814 Disaster Reserve Target 15% 20,866,449 20,699,118 21,383,491 23,475,670 25,293,392 1,817,722 Total Policy Reserve Target $34,777,415 $34,498,530 $35,639,152 $39,126,117 $42,155,653 $3,029,536 (Below) / Above Policy (1,513,888) (8,526,275) (1,419,589) 464,613 (5,297,269) (1,330,885) Actual Reserves $33,263,527 $25,972,255 $34,219,563 $39,590,730 $36,858,384 $1,698,651 Self-Insurance Fund Under-Reserve* (2,109,073) (4,580,532) (4,758,252) (5,889,878) ($5,793,359) 96,519 Remaining Contingency Reserve $10,288,005 $692,605 $8,077,820 $10,225,182 $5,771,633 ($22,552) General Fund, Fund Balance
Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 8 The purpose of the Contingency Reserve is to allow for the orderly implementation of a balancing strategy to address the fiscal impacts of unexpected events to minimize the impacts to the organization and community. The most common of these events would be an economic recession that results in a significant impact on key revenues such as sales, transient occupancy, or property taxes. The Contingency Reserve is calculated based on 10% of the most recently adopted fiscal year operating expenditure budget. This table summarizes General Fund reserve targets of 15% Disaster and 10% Contingency as required by City Council Resolution No. 22-126, which amended Resolution No. 12-066 and rescinded Resolution No. 18-056. Any use of the Disaster or Contingency reserves requires a majority vote of approval by the City Council. Staff will continue to address anticipated changes to reserves based on projections in future quarterly reports to City Council.

The FY 2023 adopted budget required strategic use of a small number of reserves to balance the budget. Reserves were largely replenished by the end of FY 2022; however, they are projected to decline slightly by the end of FY 2023. The SIF is still underfunded based on the actuarial recommended level, which continues to present a burden on the General Fund.

The graph below summarizes the General Fund Reserves since FY 2005, including a projection of ending reserves at the end of FY 2023. The FY 2023 adopted budget appropriated use of $1.0 Million of reserves to balance the budget reduced reserves below policy targets in FY 2023. FY 2023 also includes the use of carryforward appropriation from FY 2022, which is included in the revised budget. Per the City Council revised reserve policy, 50% of the surplus would be allocated to address the ongoing pension costs and liabilities, and the remaining 50% would remain in General Fund reserves to address future budget challenges.

General Fund Reserves, Summary
(FY 2023 are projections, whereas other years are actuals) Enterprise Operating Fund Revenues and Expenses
Unlike the General Fund, that relies primarily on taxes to fund programs and services, Enterprise Funds, also known as Proprietary Funds, are financed primarily from user fees and other non-tax revenues. The Summary of Revenues & Expenses, Enterprise Funds table below reports Enterprise Fund revenues and expenses through March 31, 2023, associated Annual Budget, projected end-of-year actuals and prior year actuals for this same nine-month period.

Encumbrances as of March 31, 2023, are shown separately from expense actuals as the inclusion of encumbrances within actuals can distort trends. Proprietary funds of the City include the Water Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 9 Fund, Wastewater Fund, Airport Fund, Waterfront Fund, Solid Waste Fund, Downtown Parking Fund, Clean Energy Fund, and Golf Fund.

Summary of Revenues & Expenses, Enterprise Funds
Solid Waste Fund
The Solid Waste Fund accounts for refuse revenues received from customers, payments remitted to the trash hauler, and franchise and recycling fees paid by hauler that are used for recycling programs in the City. Solid Waste Revenues are at $25.8 Million at the end of Q3, which aligns with targeted budget. Much of this revenue source is related to Solid Waste service charges ($25.3 Million). The Solid Waste Fund is 3.3% ahead of the prior year’s revenues when comparing the same period (first nine months). Expenditures are $23.9 Million (68.3% of its budget). Staff project to be below budget largely due Marborg compensation, salaries/benefits, and some savings related to professional services. Solid Waste is anticipating increased revenues as the Annual YTD Projected YTD Encumbered YTD %
Budget Actual Year End Percent Actual Variance
Solid Waste Fund
Revenues $34,272,920 $25,802,740 $34,838,346 75.3% $0 $24,973,830 3.3% Expenses 35,032,808 23,915,706 33,890,862 68.3% 924,742 21,331,690 12.1% Add / (Use) Reserves ($759,888) $1,887,033 $947,484 ($924,742) $3,642,140 Water Fund
Revenues 70,492,814 51,903,459 69,842,114 73.6% 0 50,296,311 3.2% Expenses 71,954,226 46,195,188 68,701,712 64.2% 4,823,257 47,886,910 -3.5% Add / (Use) Reserves ($1,461,412) $5,708,271 $1,140,402 ($4,823,257) $2,409,401 Wastewater Fund
Revenues 27,441,554 20,165,426 27,188,918 73.5% 0 19,027,755 6.0% Expenses 28,242,939 19,083,646 27,747,924 67.6% 1,211,683 18,357,815 4.0% Add / (Use) Reserves ($801,385) $1,081,779 ($559,006) ($1,211,683) $669,940 Downtown Parking Fund
Revenues 10,616,997 7,395,703 9,879,330 69.7% 0 5,037,010 46.8% Expenses 10,749,896 7,385,986 10,219,549 68.7% 844,868 5,781,915 27.7% Add / (Use) Reserves ($132,899) $9,717 ($340,219) ($844,868) ($744,905) Clean Energy Fund
Revenues 34,000,000 24,966,910 43,000,669 73.4% 0 5,130,569 100.0% Expenses 33,480,425 25,171,335 38,711,007 75.2% 1,243,866 5,045,319 398.9% Add / (Use) Reserves $519,575 ($204,425) $4,289,662 ($1,243,866) $85,250 Airport Fund
Revenues 27,185,151 18,750,192 26,999,111 69.0% 0 23,641,680 -20.7% Expenses 30,513,124 18,547,996 25,129,155 60.8% 2,684,510 18,739,152 -1.0% Add / (Use) Reserves ($3,327,973) $202,196 $1,869,956 ($2,684,510) $4,902,528 Golf Fund
Revenues 4,042,489 2,938,237 4,089,865 72.7% 0 2,860,096 2.7% Expenses 3,499,658 2,178,339 3,496,494 62.2% 1,129,957 2,060,587 5.7% Add / (Use) Reserves $542,831 $759,898 $593,371 ($1,129,957) $799,509 Waterfront Fund
Revenues 17,036,131 14,062,765 17,930,528 82.5% 0 13,207,764 6.5% Expenses 19,277,251 13,336,210 17,927,843 69.2% 959,765 11,571,647 15.2% Add / (Use) Reserves ($2,241,119) $726,555 $2,685 ($959,765) $1,636,117 * The YTD Budget column has been calculated based on a 3-year average of collections for revenues, and of payments made for expenses through Mar 31, which has been applied to the annual budget.

SUMMARY OF REVENUES & EXPENSES
For the Nine Months Ended March 31, 2023 Fiscal Year 2023

ENTERPRISE FUNDS
Current Year Analysis FY2023 Prior Year FY2022
Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 10 result of higher-than-expected return of excess County landfill reserves, solid waste rate revenue, and interest income revenue.

Water Fund
The Water Fund accounts for the provisions of water services to the residents of the City and some residents of the County. Through the first nine months of FY 2023, Water Fund revenues have totaled approximately $51.9 Million, or 73.6% of its adopted budget, which includes anticipated seasonal variance in revenues related to higher water demand in summer months.

Due to recent storm events, there was a slight shift in water use and because of this, staff anticipate a decrease of 3.8% in rate revenue by year end.

Expenditures ended Q3 at 64.2% of its annual budget, excluding encumbrances, or approximately $46.2 Million. Encumbrances (committed actuals) of $4.8 Million bring expenditures up to 70.9% of annual budget, which includes contracted services to be expended throughout the year. Largely due to vacancies and Special Projects (emergency pumping barge), staff anticipates expenditures to be under budget by $3.3 Million. Given the plentiful rainfall this year staff are no longer anticipating the need to purchase water this year.

Wastewater Fund
The Wastewater Fund accounts for the provision of sewer services to the residents of the City and some residents of the County. Q3 revenues are on target at $20.2 Million (73.5% of its annual budget). Only a portion of Wastewater rates depend on water usage, which explains why there is less variability in Wastewater rate revenue when compared to Water rate revenue. Various other revenue sources such as interest income, sewer tap fees, pre-treatment analysis, and Fats-OilsGrease (FOG) disposal fees experienced small variances that contributed to the overall balance of revenues.

Expenditures are below budget at $19.1 Million (67.6% of its annual budget). Encumbrances of $1.2 Million bring expenditures up to 71.9% of annual budget. The timing of payments for services and/or obligations account for most variances seen at Q3. Staff turnover continues to drive savings, as does lower than anticipated contracted lab support, reduction in facilities maintenance, and reduced participation in the video assistance program.

Downtown Parking Fund
Downtown Parking Fund accounts for the provision of parking services in the downtown area of the City. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, billing and collection of fees, capital acquisition, construction, and financing and related debt service. At Q3, actual revenues for Downtown Parking are approximately $7.4 Million or 69.7% of its annual budget. Service charges are down slightly, mainly due to difficulty staffing hourly lots for self-service in the mornings and decreased demand. Increased hourly parking fees coupled with minimal on-street enforcement may encourage street parking; the decrease in service charges is partially offset by increased monthly parking revenue. Other revenue factors include the Parking and Business Improvement Area (PBIA) assessment exceeding projected budget by nearly $144,000, due to stronger business activity Downtown. Conversely, Intergovernmental revenue had a shortfall of approximately $41,000 due to staffing shortages within the Crossing Guard Program.

Overall expenditures for Q3 are $7.4 Million, or 68.7% of its annual budget. Continued vacancies, including a Parking Supervisor, Parking Resources Specialist, and Parking Maintenance Coordinator, contribute to much of these savings. Savings in Supplies and Services, and Special Projects are mainly due to unspent encumbrances of approximately $844,868 that are anticipated Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 11 to be largely expended by year end. Additional savings are anticipated related to the PBIA assessment study that remains on hold because changes to the State Street Promenade make it difficult to assess the benefits to Downtown businesses based on proximity to the parking facilities.

Clean Energy Fund
The Clean Energy Fund accounts for the cost to procure clean and renewable electricity on behalf of the Santa Barbara Community. The Santa Barbara Clean Energy Fund began operation in October 2021 and started receiving revenue in Q2 FY 2022. Revenues are typically recorded one-month in arrears, so while a typical Q3 report would have nine months of activity, this report only contains eight months of activity. Through eight months, revenues are approximately 75% of budget, which is trending above projection. The energy rates that SBCE charges customers are tied to the rates that Southern California Edison (SCE) charges customers (a slight 1.6 cent per kilowatt-hour premium above the SCE rate). SCE’s rates can change throughout the year, and recently, SCE instituted a substantial rate increase in February and plans another increase to go into effect June 2023. This will result in SBCE’s projected revenues surpassing its budgeted revenues perhaps by as much as $9.0 Million.

Expenditures for the SBCE Fund through Q3 are approximately $25.2 Million or 75.2% of the budget. There has been significant volatility in the cost of energy in the open market, which led to large one-time increases in September and December. At this point, staff believe expenditures at year end will surpass the budget by roughly $5.2 Million. The combined effect of the increases in revenue and expenditures means that SBCE is projected to enjoy a significant positive variance at year end, which will help bolster reserves of this young fund.

Airport Fund
The Airport Fund accounts for the operation of the municipal airport and the administration of leases of airport property. The Airport Department continues to see a sustained level of commercial airline passenger activity since the beginning of summer in June 2022. Commercial passenger counts hit a new monthly record of 120,000 in October 2022 and just saw the highest February passenger count ever with 96,000 monthly passenger count. Weather related and technical nationwide issues with Southwest Airlines contributed to the sharp decline in December and January passenger counts. Commercial/industrial lease revenue is behind projection due to unfilled Property Division vacancies needed to support necessary workload, but terminal revenue sources show positive trend (ground transportation, rental cars, and parking). Commercial Aviation revenue is trending below budget but should be closer to budget by fiscal year end. Total revenue collected through March 31, 2023, is approximately $18.8 Million or 69% of its annual budget.

Total Airport expenses of $18.5 Million and $2.7 Million in encumbrances encompass 69.6% of its annual budget. The airport is actively recruiting to fill vacancies to ensure operational needs are met. The Airport is seeking additional appropriations to support the Parking Program, which has grown into the Airport’s largest revenue source. They are also seeking authorization to reprogram existing appropriations to support the replacement of two terminal boilers, HVAC system repair, and internet fiber installation.

Golf Fund
The Golf Course Fund accounts for the operation of the municipal golf course. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, capital acquisition and construction, financing and related debt service, and billing and collection of fees. At Q3, actual Golf revenues are $2.9 Million Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 12 or 72.7% of its annual budget. Paid rounds and concession performance are projected to exceed budget this fiscal year. Despite the rainy weather experienced in Q3, the golf course is experiencing high use of the facility and is on target to achieve 64,295 paid rounds of golf which is 2% (1,679 rounds) ahead of budget. Mulligans, the golf course restaurant concessionaire, continues to perform well as the department projects 9.6% in additional revenue above budget.

As a result of achieving budget, the City anticipates that the operator will receive an incentive fee for a third consecutive year.

Expenditures at Q3 are $2.2 Million (62.2% of annual budget), which is consistent with projected levels. Encumbrances of $1.1 Million for contracted services will be spent by the end of the fiscal year. The Department requests to utilize $412,399 of Golf Fund Reserves to pay the Golf Safety Improvement Master Plan Loan in full. The current amount of revenue in the Golf Fund reserves is $1.5 Million above Reserve Policy requirements, and the Department is projected to return $593,371 to the Reserve by the end of FY 2023.

Waterfront Fund
The Waterfront Fund accounts for the operation of the City managed waterfront that includes a public wharf, a small craft harbor, and parking facilities. Waterfront’s revenues and expenditures for Q3 of FY 2023 show signs of business recovery. Actual revenues for Q3 are $14.1 Million or

82.5% of its annual budget. Slip Permit Transfer Fees are down 23.75% when compared to the prior year. A total of 63 transfers took place in Q3 representing $890,775 in revenue. Commercial and Food Service Lease revenues (including both Stearns Wharf and the Harbor) are both up compared to last year. Parking revenue is up approximately 11.62% ($305,422) versus last year.

Staff are projecting to exceed FY 2023 budgeted revenues by nearly $895,000 or 5%.

Actual expenditures for Q3 are $13.3 Million (69.2% of annual budget) and encumbrances are $959,765, collectively representing 74.2% of the Waterfront’s total annual budget. Salaries and Benefits finished slightly below budget for Q3. The savings are the result of numerous positions being held vacant. As of March 31, 2023, Waterfront operations are forecasting expenditure savings of over $1,350,000.

The Waterfront Department incurred approximately $2.5 Million in costs because of the January 2023 storms and swell events. As a result, the Department made use of reserves to cover these costs and acted quickly to make repairs and cleanup. As an Emergency Declaration was declared at the Federal, State, and Local levels, it is the intent of the Waterfront to go after all available reimbursement funding options. The Waterfront is actively working with other City departments and the City’s Emergency Services Manager to seek reimbursement from FEMA.

Enterprise Operating Funds: Year-End Projected Reserves The Enterprise Operating Funds, Reserves table below summarizes the anticipated impact on reserves in each major enterprise fund at the end of FY 2023 compared to policy reserve targets.

Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 13 Enterprise Operating Funds, Reserves
For FY 2023, all enterprises aside from Clean Energy and Downtown Parking, are anticipated to have a funded position. It was mentioned Q2 that the Clean Energy fund would propose a reserve policy, this occurred and was adopted December 8, 2022, by Resolution No. 22-126. This policy noted that the Solid Waste and Clean Energy Enterprise Operating Funds shall utilize the contingency reserve to buffer a significant loss in revenue or the impacts of significant rate increases, and the use of these reserves should be considered one-time revenue as future rates will need to be adjusted to address any ongoing expense increases.

Interdepartmental Services Operating Fund Revenues and Expenses The City has established internal service funds for centralized services that provide support across most or all funds and departments. These functions primarily include Fleet, Facilities, Risk Management, Creeks, and Information Technology. The interim quarterly reports would typically not discuss in detail major changes in the City’s internal services departments and funds, as major changes typically do not occur during the year.

Self-Insurance Fund
The City purchases insurance policies to cap its exposure to loss for specific hazards. The SIF accumulates revenues through an annual allocation from departments as an expenditure to each department. The SIF then funds the program’s annual renewals for insurance coverage for claims that may arise, and to cover salaries/benefits of staff administering the program.

The SIF has had and is projected to have challenges in receiving adequate annual allocations to the fund from operating departments and not having adequate reserves in the fund to pay future claims. The cost to the City to retain existing property, excess general liability, and other insurance programs has increased substantially over the years. Liability coverage has become more expensive across the nation due to various substantial claims; notable claims related to law enforcement and droughts and wildfires in the Western United States and California included.

The adopted budget included additional allocations into the SIF to begin to increase reserves to achieve the actuarial recommended level over the next nine years. Expenditures of $10.1 Million represent 71% of total budgeted expenditures through Q3; however, multiple, active claims and other litigation will result in claim payments by the end of FY 2023. Staff anticipate total claim payments to exceed the expenditure budget in FY 2023. Staff will monitor claim payment activity and will likely request a budget adjust during Q4 to increase expenditure appropriation by using reserves.

Enterprise
Operating Funds
FY2022 Policy
Reserves
FY2022
Available
Reserves
FY2023
Projected Add
(Use) of
Reserves
FY2023
Projected
Available
Reserves
Solid Waste 5,174,504 2,441,640 947,484 3,389,124
Water 32,648,426 15,106,164 1,140,402 16,246,566
Wastewater 11,112,046 658,121 (559,006) 99,115
Downtown Parking 2,784,756 58,443 (340,219) (281,776)
Clean Energy 8,306,226 (9,694,992) 4,289,662 (5,405,330) Airport 7,632,879 5,403,913 1,869,956 7,273,869
Golf 969,828 1,546,063 593,371 2,139,434
Waterfront 3,932,918 4,207,206 2,685 4,209,891
Fiscal Year 2023 Interim Financial Statements
For the Nine Months Ended March 31, 2023 (75% of Year Elapsed) 14 The most current actuarial report recommended a SIF balance of $24.1 Million by the end of FY 2023, a $5.8 Million increase from the prior fiscal year.

On November 16, 2021, staff presented an overview to the Finance Committee of major changes anticipated in the insurance industry, budget considerations for FY 2022 and FY 2023, and substantial increases to operating department allocations into the SIF to ensure ongoing premium and claim payments costs can be met, and adequate reserves are achieved. The Finance Committee unanimously supported implementing a plan to gradually increase allocations into the SIF over the next nine fiscal years to achieve target reserves at or near the actuarial recommended level. Staff built these allocation increases into the FY 2023 budget.

Staff proposed a $4.0 Million transfer from the General Fund into the SIF by the end of FY 2023.

This action was adopted during Q2 and will help stabilize the SIF reserves further to fund the City’s insurance programs and reduce future funding challenges.

The graph below, Self-Insurance Fund, Actuarial Recommendation, shows the actuarial recommended reserve, the actual/projected cash in the SIF over the past 12 years, and the gradual/substantial reduced reserve levels in recent years.

Self-Insurance Fund, Actuarial Recommendation
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Self-Insurance Fund
Actuarial Recommended Reserve vs. Actual/Projected Cash Total Actuarial Recommended Reserve Cash Held in SIF
ATTACHMENT 3
Increase
Increase (Decrease) in Addition to
(Decrease) in Estimated (Use of)
Appropriations Revenues Reserves
GENERAL FUND (Fund 1000)
$ - (57,249) $ 57,249 $
$ - 57,249 $ (57,249) $
$ - (823,566) $ 823,566 $
$ - 823,566 $ (823,566) $
Increase revenue and expense appropriation; new contract with Sanctuary Centers to stage construction materials at Spencer Adams Parking lot. $ 6,760 6,760 $ - $
Total General Fund (1000) $ 6,760 6,760 $ - $
GPU 1030 Fund (Fund number 1030)
GPU 1030 Fund (Fund number 1030)
Approve a transfer in of $823,566 from the Community Development General Fund to the General Plan Update Fund (1030). The General Plan Update Fund has a negative cash balance as a result of expenditures incurred during the last General Plan update. The transfer will resolve the negative cash balance. $ 823,566 - $ 823,566 $
Total GPU 1030 Fund (Fund number 1030) $ 823,566 - $ 823,566 $ FEMA Disaster Fund (2707)
Increase appropriations for remaining litigation expenses related to the business interruption insurance claim related to the Thomas Fire. $ (15,000) 15,000 $
Total FEMA Disaster Fund (2707) $ - 15,000 $ (15,000) $ FEMA COVID-19 Fund (2709)
Increase estimated revenues in FEMA reimbursements and increase appropriations in professional services by $15,000 for FEMA Disaster Fund for final AG Witt invoices related to cost recovery efforts. $ 15,000 15,000 $ - $ Total FEMA COVID-19 Fund (2709) $ 15 15,000 $ - ,000 $
Parks and Recreation Miscellaneous Grants Fund (2860)
Increase revenue and expense appropriation for final disbursement of Hann Trust. $ 2,836 2,836 $ - $ Total Parks and Recreation Miscellaneous Grants Fund (2860) 2,836 $ 2,836 $ - $ Repurpose existing appropriations of $57,249 in ARPA Covid testing for Employee Wellness Program.

Increase/decrease appropriations to transfer out of $823,566 from the Community Development General Fund from salary & benefit savings to the General Plan Update Fund (1030). The General Plan Update Fund has a negative cash balance as a result of expenditures incurred during the last General Plan update. The transfer will resolve the negative cash balance.

City of Santa Barbara
Fiscal Year 2023 Financial Statements for the Nine Months Ended Mar 31, 2023 Schedule of Proposed Third Quarter Budget Adjustments

ATTACHMENT 3
Increase
Increase (Decrease) in Addition to
(Decrease) in Estimated (Use of)
Appropriations Revenues Reserves
SPECIAL REVENUE FUNDS (Continued)
Capital Outlay Fund (3000)
$ - (100,000) $ 100,000 $
$ - 100,000 $ (100,000) $
$ - (125,000) $ 125,000 $
$ - 125,000 $ (125,000) $
$ - (175,000) $ 175,000 $
$ - 175,000 $ (175,000) $
Total Capital Outlay Fund (3000) $ - - $ - $
Measure C Capital Fund (3010)
The FY2023 Measure C budget includes appropriations for the annual debt service payment for the new Police Building.

The timeline has extended, and the first debt issuance payment is not anticipated until FY2025. So the FY2023 expenditure appropriation can be deappropriated. Staff has programmed these funds in the City Administrator's FY2024 recommended budget.
$ - (4,168,880) $ 4,168,880 $
$ - (30,000) $ 30,000 $
$ - 30,000 $ (30,000) $
$ - (600,000) $ 600,000 $
$ - 600,000 $ (600,000) $
$ - (101,385) $ 101,385 $
$ - 101,385 $ (101,385) $
Total Measure C Capital Fund (3010) $ - (4,168,880) $ 4,168,880 $ Streets Grant Capital Fund (3410)
Increase revenue and expenditure appropriations for the newly awarded Las Positas Rd and Stanley Drive project, funded by Highway Safety Improvement Program grant funds, for the preliminary engineering phase of the intersection of Las Positas and Stanley Drive to replace rectangular rapid flash beacons, intersection lighting, and pedestrian refuge island. $ 90,000 90,000 $ - $
Increase revenue and expenditure appropriations for the newly awarded grant for the De La Vina & Valerio project, funded by Highway Safety Improvement Program grant funds, for the preliminary engineering phase of the intersection of De La Vina and Valerio for curb extensions, signs, and markings to increase pedestrian visibility. $ 13,500 13,500 $ - $
Increase revenue and expenditure appropriations for the Mission and State Lighting Project, funded by Highway Safety Improvement Program, for the Preliminary Engineering phase to cover the additional cost of lighting for dedicated turn lanes on southbound State Street at Mission Street.
$ 20,000 20,000 $ - $
Increase revenue and expenditure appropriations in the amount of $1,236,764 for the Carpinteria Street Bridge Replacement Project, funded by Highway Bridge Program funds, for the preliminary engineering and right of way phases. $ 1,236,764 1,236,764 $ - $ Increase revenue and expenditure appropriations for the Westside and Lower Westside Neighborhood Active Transportation Plan Implementation, funded by newly awarded Active Transportation Program grant funds, for the Project Approval & Environmental Documents phase to provide active transportation routes to disadvantaged school and completes network gaps.
$ 1,925,000 1,925,000 $ - $
Increase revenue and expenditure appropriations in the Milpas Street Crosswalk Safety and Sidewalk Widening Project, funded by the newly awarded Active Transportation Program grant funds, for the Project Approval & Environmental Documents phase that will create a safe corridor for active transportation users by widening sidewalks, installing curb extensions, lighting, and accessibility at intersections. $ 1,000,000 1,000,000 $ - $
Move $100,000 in ARPA appropriations from Eastside Neighborhood Park Community Garden Project to fund the Plaza Del Mar Band Shell Project.

Allocate existing expenditure appropriations of $30,000 from the Measure C Overlays project, which is experiencing savings with projects coming in under budget, to the Modoc Multiuse Path Extension to supplement the project for overlay and paving expenses that are higher than projected.

Allocate existing expenditure appropriations of $600,000 from the Measure C Overlays project, with savings from projects coming in under budget, to the De La Vina at Vernon St. Bridge project to supplement real property acquisition expenses this fiscal year.

Move expenditure appropriations in the Measure C Capital Fund already appropriated for equipment purchases, to allocate funds for a new paving roller for ongoing production paving projects.

Move $125,000 in ARPA appropriations from Oak Park Dance Floor replacement to fund the Plaza del Mar Bandshell.

Move $175,000 in ARPA appropriations from Park Major Turf & Irrigation Renewal to fund the Plaza del Mar Bandshell.

ATTACHMENT 3
Increase
Increase (Decrease) in Addition to
(Decrease) in Estimated (Use of)
Appropriations Revenues Reserves
SPECIAL REVENUE FUNDS (Continued)
Increase revenue and expenditure appropriations for the Cliff Drive, Urban Highway to Complete Street, Transformation Project, funded by the newly awarded Active Transportation Program grant funds, for the Project Approval & Environmental Documents phase to construct a 3.1 mile long multiuse path and 11 new crosswalks along Cliff Drive. $ 1,920,000 1,920,000 $ - $
Total Streets Grant Capital Fund (3410) $ 6,205,264 6,205,264 $ - $

ENTERPRISE FUNDS
Water Operating Fund (5000)
Increase expenditure appropriations in the amount of $2,000,000 from the Water Fund Reserves to transfer to the Water Capital Fund for a contract change order for the Desal Conveyance, to cover additional work outside of the original contract caused by unforeseen underground conditions.
$ - 2,000,000 $ (2,000,000) $
Increase expenditure appropriations in the amount of $50,000 from the Water Fund reserves to transfer to the Water Capital Fund, for additional costs incurred in the Ground Water Development project due to the restart of the Aquifer Storage Recovery Pilot project.
$ - 50,000 $ (50,000) $
$ -
Total Water Operating Fund (5000) $ - 2,050,000 $ (2,050,000) $ Water Capital Fund (5010)
Increase revenue and expenditure appropriations in the amount of $2,000,000 for a contract change order for the Desal Conveyance main contractor, funded from Water Fund reserves, to cover additional work outside of the original contract caused by unforeseen underground conditions.
$ 2,000,000 2,000,000 $ - $
Increase revenue and expenditure appropriations in the amount of $50,000, funded from the Water Fund reserves, for additional costs incurred in the Ground Water Development project due to the restart of the Aquifer Storage Recovery Pilot project.
$ 50,000 50,000 $ - $
Reduce existing expenditure appropriations in the Main Replacement project due to staffing shortages, and allocate the funds to the Main Replacement reserve for future water main replacement efforts. $ - (5,126,432) $ 5,126,432 $ Total Water Capital Fund (5010) $ 2,050,000 (3,076,432) $ 5,126,432 $ Wastewater Operating Fund (5100)
Increase expenditure appropriations in the amount of $500,000 from the Wastewater Operating Fund reserves to transfer to the Wastewater Capital Fund to cover the cost of increasing material costs and the additional cost of contractor support resulting from staff shortages.
$ - 500,000 $ (500,000) $
Total Wastewater Operating Fund (5100) $ - 500,000 $ (500,000) $ Wastewater Capital Fund (5110)
$ 500,000 - $ 500,000 $
$ - 500,000 $ (500,000) $
Total Wastewater Capital Fund (5110) $ 500,000 500,000 $ - $ SB Clean Energy Fund (5500)
Increase estimated revenues and appropriations by $5,500,000. Electrical Energy Costs - the volatility in the price of electrical energy in the spot energy markets means SBCE has experienced significant increases in cost, and necessitates additional appropriations. Midyear rate increases anticipated means those additional appropriations will be covered by increased estimated revenues.
$ 5,500,000 5,500,000 $ - $
Total SB Clean Energy Fund (5500) $ 5,500,000 5,500,000 $ - $ Golf Course Fund (5600)
Increase appropriations from reserves to pay off the Golf Fund Safety Improvement Master Plan loan to the General Fund. 412,399 $ - $ (412,399) $ Total Golf Course Fund (5600) $ - 412,399 $ (412,399) $ Increase revenue and expenditure appropriations in the amount of $500,000 for the Sanitary Sewer Overflow Compliance program, funded from Wastewater Operating Fund reserves, to cover the cost of increasing material costs and the additional cost of contractor support resulting from staff shortages.

ATTACHMENT 3
Increase
Increase (Decrease) in Addition to
(Decrease) in Estimated (Use of)
Appropriations Revenues Reserves
ENTERPRISE FUNDS (Continued)
Airport Operating Fund (5700)
Appropriate $120,000 from reserves to support the parking program. $ - 120,000 $ (120,000) $ Reprogram existing appropriations from the Terminal Expenses Project to the Lessee Building Maintenance Project and appropriate an additional $67,242 transfer from reserves. $ - 67,242 $ (67,242) $ Increase appropriations and estimated revenues by $53,000 from a transfer in from the Capital fund for the internet fiber installation. $ 53,000 53,000 $ - $
Total Airport Operating Fund (5700) $ 53,000 240,242 $ (187,242) $ Airport Capital Fund (5710)
$ - 67,242 $ (67,242) $
$ 67,242 - $ 67,242 $
$ - (53,000) $ 53,000 $
$ - 53,000 $ (53,000) $
Total Airport Capital Fund (5710) $ 67,242 67,242 $ - $ Waterfront Operating Fund (5800)
Use of operating reserves to transfer to the capital fund for the boat replacement project. 100,000 $ - $ (100,000) $ Total Waterfront Operating Fund (5800) $ - 100,000 $ (100,000) $ Waterfront Capital Fund (5810)
Increase appropriations and estimated revenues from a transfer in from the operating fund to the capital fund for the boat replacement project. $ 100,000 100,000 $ - $
Total Waterfront Capital Fund (5810) $ 100,000 100,000 $ - $

INTERNAL SERVICE FUNDS
Self Insurance Fund (6100)
Increase expenditure appropriation for General Liability claim payments projected through the end of FY2023 using available Self-Insurance Fund reserves. $ (550,000) 550,000 $ Increase expenditure appropriation for Worker's Compensation claim payments projected through the end of FY2023 using available Self-Insurance Fund reserves. $ (500,000) 500,000 $ Total Self Insurance Fund (6100) $ - 1,050,000 $ (1,050,000) $ Fleet Replacement Fund (6410)
Increase revenue and appropriations in the Fleet Replacement Fund, funded by an allocation in the Measure C Capital Fund already appropriated for equipment purchases, to purchase a new paving roller for ongoing production paving projects.
$ 101,385 101,385 $ - $
Total Fleet Replacement Fund (6410) $ 101,385 101,385 $ - $ Increase/Decrease appropriations by $53,000 to transfer out to the Operating Fund for the internet fiber installation.

Appropriate $67,242 from a transfer in from the Airport Operating Fund to the Lessee Building Maintenance Project.

CITY OF SANTA BARBARA

FINANCE COMMITTEE AGENDA REPORT
AGENDA DATE: May 16, 2023
TO: Finance Committee
FROM: Administration Division, Finance Department
SUBJECT: Finance Committee Review of the Fiscal Year 2024 Recommended Budget
RECOMMENDATION: That Finance Committee:

A. Hear a report from staff on General Fund non-departmental revenues, including growth assumptions, in connection with the Committee’s review of the Fiscal Year 2024 Recommended Budget;
B. Hear a report from staff, in connection with the Recommended Budget for Fiscal Year 2024, on staff recommended Adjustments;
C. Recommend the City Council approve the Cost Recovery and Revenue Policy; and D. Develop final recommendations to Council based on the Committee’s review of the recommended budget and proposed fee changes.

DISCUSSION:

In accordance with City Charter, on Tuesday, April 18, 2023, the Recommended Budget for Fiscal Year 2024 was submitted to Council. Council heard an overview of the Recommended Budget and approved the Proposed Schedule of all Budget Review Meetings and Public Hearings.

General Fund non-departmental revenues and growth assumptions will be discussed with the Finance Committee.

Over the course of two meetings, the Finance Committee has met to review various elements of the Fiscal Year 2024 Recommended Budget. At this meeting, staff will present the staff recommended adjustments. Adjustments generally consist of proposed changes to the recommended budget filed in April based on new or updated information, or to make technical corrections to the budget.

Agenda Item No. 2
File Code No. 120.03
Finance Committee Agenda Report
Finance Committee Review of the Fiscal Year 2024 Recommended Budget May 16, 2023

In addition, the Finance Committee will be asked to develop final recommendations related to the topics presented to the Committee. The topics presented to the Finance Committee, for which staff will be seeking recommendations, are listed below:
 General Fund proposed fee changes;
 Enterprise Fund proposed fee changes (excluding utility rates);  General Fund non-departmental revenue estimates and assumptions; and  Staff recommended technical adjustments to the City Administrator’s recommended budget.

The table below summarizes the fee changes being proposed for General Fund departments.

Department Proposed Fee Changes
Finance Utility billing late fee & administrative fee
Human Resources Fingerprint & background check services fee Library Library services, venue rentals, use of exhibit space Public Works Engineering rates & permit fees
Parks & Recreation Programs & services
Police
Appeals, staffing rates, alarms, parking violations,
concealed carry permit, Live Scan, & towed vehicle
release fees
Community Development Permits & fees
The table below summarizes the fee changes being proposed by Enterprise Fund departments.

Department Proposed Fee Changes
Downtown Parking Hourly parking rates, permit fees, business special use Airport Parking rates, permit fees, photoshoot & filming fees Solid Waste Trash enclosure & special services (not rates) Water & Wastewater Installation & permit fees, capacity charges (not rates) Golf Green & cart fees
Waterfront Slip, parking, & permit fees
Finance Committee Agenda Report
Finance Committee Review of the Fiscal Year 2024 Recommended Budget May 16, 2023

The table below summarizes the General Fund revenue estimates for FY2024 and FY2025. During this meeting, staff will discuss the non-departmental tax revenues in detail.
$ Millions FY2021
Actual
FY2022
Actual
FY2023
Projection
FY2024
Budget
FY2025
Budget
Sales Tax $24.3 $28.5 $29.3 $30.7 $31.7
Measure C Sales Tax 25.4 30.8 30.7 31.9 33.0
Property Tax 39.9 42.2 44.4 46.4 48.7
Transient Occupancy
Tax 15.7 26.6 27.5 27.5 29.2
Other Taxes 13.0 13.5 12.9 12.9 13.4
Other Revenues 53.2 54.3 52.1 52.1 53.6
Total General Fund
Revenues $171.6 $196.0 $201.5 $201.5 $209.5
On May 2, 2023, staff presented the draft Cost Recovery and Revenue Policy to the Finance Committee. Staff is seeking the Finance Committee’s recommendation of approval of the policy to City Council.

The public can access the City Administrator’s Recommended Budget for FY2024 and FY2025 on the online budget tool at https://santabarbaraca.gov/finance/budget-reports or clicking here.

ATTACHMENT: Cost Recovery and Revenue Policy
PREPARED BY: Natalija Glusac, Budget Manager
SUBMITTED BY: Keith DeMartini, Finance Director
APPROVED BY: City Administrator's Office

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:

ATTACHMENT
Purpose
The purpose of this policy is to establish a Citywide cost recovery and revenue policy by identifying cost recovery factors and concepts that should be considered for setting cost recovery target levels for each program offered by the City. This Policy allows the City services users, staff, and general taxpayers to better understand the philosophy behind pricing of a program or service. The policy is based on the cost recovery goal for the service established by the City to provide the service and whether the service is a public, public and individual, or primarily an individual benefit service.

Background
The City of Santa Barbara is simultaneously accountable for maintaining a sustainable budget that benefits the overall community and one that also responds to the interests of the individuals who live here. While the primary mission of government is to satisfy community needs, many City services solely benefit specific individuals or businesses. It is the intention of this policy to establish cost recovery levels so that the public at large is not subsidizing activities that benefit individual recipients through general tax revenues. The foundation of effective cost recovery is a well-conceived, regularly reviewed policy. Such a policy provides a guideline for setting equitable fees given the full cost of each service, allowing optimum cost-recovery rates for defined services, and alleviating unintended subsidization of these services from General Fund resources.

A cost recovery policy provides guidelines for setting fees given the full cost of service. It does not bind policymakers to increasing or decreasing fees but does provide rationale for doing so. The lower fees are set, relative to full cost recovery, the more General Fund dollars are required to maintain the service. This additional support must then be weighed against the other needs for General Fund resources, including needs which may not have similar cost recovery options.

Cost recovery does not imply that the target is total recovery of the cost; however, a target is established according to a variety of considerations and may range from 0% to more than 100% of direct costs.

Principles, Definitions, & Criteria:

The guiding principles for the creation of an effective pricing policy are as follows:
 Accessibility, Fairness, and Affordability based on the category of service and benefit level.  Effective and appropriate funding strategies from General Fund, user fees, and other sources.
 Improved efficiency in the cost of providing programs, services, and facilities.  Financial sustainability by achieving established cost recovery targets.

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:

DEFINITION OF TERMS:

Public Services are services the City offers that provide all users the same level of opportunity to access the service. The level of benefit is the same to all users. Public Services normally have low or no user fees associated with their consumption. The cost for providing these services is borne by the General Fund.

Public and Individual Benefit Services are services whereby the user receives a higher level of benefit than the general taxpayer. The taxpayer benefits as a whole because the service provides a more livable community and the service has a good public benefit as well. Public and Individual Services can be priced using either a partial overhead pricing strategy or a variable cost pricing strategy. Partial overhead pricing strategies recover all direct operating costs and some determined portion of fixed indirect costs. Variable cost pricing strategies recover a determined portion of the fixed direct costs by adding a markup to the variable costs. The expectation is that the markup will contribute to meeting all or a part of fixed direct costs and generate some level of indirect cost recovery. The portion of fixed indirect costs not recovered by the price established represents the subsidy. Whatever the level of subsidy, staff needs to inform the users by letting them know that the City is investing a certain dollar amount and/or what percentage level of investment they are making in their experience.

Individual Benefit Services are services where only the user benefits. For these services, the City should implement a pricing strategy to achieve full cost recovery. The price of this service is intended to recover all direct and indirect costs associated with providing the service.

Direct Expenses are City costs associated with staff, materials and supplies, and other resources associated with providing the program, service, or operating the facility. Direct expenses also include the proportional cost of the program or facility supervisor, coordinator, or administrative personnel based on the time required to plan, organize, and direct the operation of that program, service, or facility.

Indirect Expenses are the cost of the City Departments to provide the program or facility. Indirect expenses include Department Administration, marketing, information technology, and facility or maintenance staff. Indirect expenses also include City wide functionalities such as Human Resources, Information Technology, Fleet, Facilities, Finance, City Administrator, and City Attorney time associated with supporting the operation of the program or facility, among other expenses.

Cost Recovery Percentage outlined in this Policy is based on Direct Expenses only and does not include Indirect Expenses. It is generally recommended that an additional 5%-10% be added to the fees established for Important and Value-Added programs, services, and facilities, and 0%-5% for Core Services programs, services, and facilities, to attempt to offset some portion of the Indirect Expenses associated with providing those activities.

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:

CORE SERVICES (0%-20% Cost Recovery)
Core services are those programs, services, and facilities that the City of Santa Barbara must provide and/or are essential in order to capably govern the municipality and operate. The failure to provide a core service at an adequate level would result in a significant negative consequence relative to the City’s health and safety and economic and community vitality. The criteria for a core service are:
 City of Santa Barbara is mandated by law or is contractually obligated by agreement to provide the service.
 The service is essential to protecting and supporting the public’s health and safety.  The service protects and maintains valuable City assets and infrastructure.  The City’s residents, business customers, and partners would generally and reasonably expect and support the City in providing the service, and that service is one that cannot or should not be provided by the private sector, and provides a sound investment of public funds.

Examples of City functions that are considered Core Services include elections, City Council material distribution, Boards and Commissions, filings, records management, fire services, library services, Parks and Recreation Centers and Community Centers, maintenance of parks, and safety and noise enforcement by Police.

IMPORTANT SERVICES (20%-80% Cost Recovery)
Important services are those programs, services, and facilities the City should provide, and are important to governing the municipality and effectively serving its residents, businesses, customers, and partners. Providing important services expands or enhances the ability to provide and sustain the City’s core services, health and safety, and economic and community vitality. The criteria for an important service are:
 Service provides, expands, enhances, or supports identified core services.  Services are broadly supported and utilized by the community, and are considered an appropriate, important, and valuable public good. Public support may be conditional upon how the service is paid for or funded.
 Service generates income or revenue that offsets some or all of its operating cost and/or is deemed to provide an economic, social, or environmental outcome or result within the community.

Examples of Important Services include water heater installation permits, hazardous materials fees, fire permit/safety inspection/safety plan check fees, Parks & Recreation youth sports leagues, and animal/vehicle impounding.

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:

VALUE-ADDED SERVICES (80%-100% Cost Recovery)
Value-Added services are discretionary programs, services, and facilities that the City may provide when additional funding or revenue exists to offset the cost of providing those services. These programs and services provide added value to the residents, businesses, customers, and partners above and beyond what is required or expected of a municipality. The criteria for added value services are:
 Service expands, enhances, or supports Core or Important services, and the quality of life of the community.
 Services are supported and well utilized by the community and provide an appropriate and valuable public benefit.
 Service generates income or funding from sponsorships, grants, user fees, or other sources that offsets some or all of its cost and/or provides a meaningful economic, social, or environmental benefit to the community.

Examples of Value-Added Services include Citizen CPR classes, fire extinguisher training, afterschool programs, summer camps, animal vaccination, and dead animal disposal.

ACCESSIBILITY, FAIRNESS AND AFFORDABILITY
This Policy supports equity and fairness because it requires those who personally benefit from a program or service above what the general taxpayer receives to pay for that added benefit.

Affordability should be based on both the level of benefit and ability to pay. For example, the City should not subsidize programs with tax support solely based on the age of the user. The type of service and benefit received will directly determine the cost recovery level or pricing strategy to be used in the pricing of the services and products.

SUPPLEMENTAL FUNDING
Supplemental funding from user fees and prices charged for programs, activities, and services assist in the overall funding of the City’s operations. The revenue produced through supplemental funding provides the City the needed revenue for operations, capital costs, and marketing to promote programs and services available to the community. These dollars can come from any source that supports operations and include grants, sponsorships, partnerships, permits, special rental uses, concessions, and many other options. The City should identify supplemental funding opportunities whenever possible and where appropriate.

EFFECTIVENESS
City staff can evaluate how the service is delivered and if it is delivered in the most effective and efficient manner, based on the cost to deliver the service. Priorities to enhance user or visitor experiences are clearly defined, because the services provided are made visible and the priorities are

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:
established based on the direct user costs that are associated with the activities that users want. Pricing City services correctly can achieve these positive results:

1. Reduces overcrowding of programs and facilities, which enhances supervision and improves visitor experience.

2. Indicates user and visitor demand and support for the service.

3. Increases positive user and visitor feedback.

4. Provides encouragement to the private sector to partner with Departmental programs through contracts that can bring greater revenue to the City.

5. Ensures stronger accountability on staff and management of the service.

6. Creates program choices for those who want a higher level of quality or individual attention. (i.e., private lessons versus group lessons) through differential pricing.

DISTRIBUTION OF REVENUE FUNDS TO ACHIEVE COST RECOVERY GOALS Distribution of Revenue means dollars generated from each activity are redistributed back to the area they came from to pay direct and indirect costs in some situations, and for future improvements associated with a facility or activity. The staff will document the cost of services provided through a costing model. The true cost of each activity is designated as direct and indirect costs associated with providing a product or service. An annual review of all prices is recommended to document the changes that have occurred within the products or services provided by City. This will help staff to evaluate which program, product, or service should have adjustments based on the Policy.

City of Santa Barbara City Council and staff will set prices for services based on the following assessment:
 What is the cost to provide the service and what is the unit cost per registered participant or attendance at the program or facility?
 Is the program or service core, important, or value added based on the criteria established and the level of cost recovery and subsidy?
 What level of benefit does the program provide? Is the benefit public, individual and public, or primarily an individual benefit based on the definitions in the pricing policy?  Does this price support the cost recovery goal desired for the program or facility to support sustainability?
Pricing Policies & Procedures:

Key Elements in implementing the Pricing Policy include:
 Create appropriate value based on benefit level and price accordingly.  Calculate the costs (direct/indirect) and level of cost recovery goal as established for that service.

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:
 Compare how the program price of facility use cost compares in the marketplace of private and public providers.
 Price services correctly the first time based on cost and target for cost recovery.  Use differential pricing based on participant, product, and times to encourage greater use of the service or facility.
 Educate staff, volunteers, boards, and officials on the methodology to establish cost recovery, level of subsidy, and eventual price for program, service, or facility.  Communicate cost of service to program and facility users so they understand how their fees contribute to the total cost of the service and level of subsidy from City.

ESTABLISH PRICING/COST RECOVERY CRITERIA
 Does this program/service align with the Departmental Vision and Mission?  The program/service meets at least one of the City’s strategic directions.  The program has a strong social value that is supportive of an identified strategic direction.  The program, service, or facility is capable of achieving its established cost recovery target.  The program has strong economic appeal and creates a positive return on investment.  The program has a high partnering capability to expand or enhance service and/or offset operational costs.
 The program/service currently meets the capacity performance measures developed by staff.  What classification of Benefit Level does it fall under (Public, Public and Individual, or Individual)?
 What is the true cost to provide the service and current level of subsidy?  What is the current price of the service and what level of cost recovery does it support now? What pricing alternatives are currently being used?

PRICING AND COST RECOVERY GOALS
Public Benefit Services = Core Direct Cost Recovery (0%-20%) Core services provide the broadest public and community benefit to the City of Santa Barbara, and should be primarily funded by the City’s General Fund and tax support. A higher level of tax support is appropriate, as it helps the City achieve key elements of its strategic plan and support the values of the City in serving the public.

Public and Individual Benefit Services = Important Direct Cost Recovery (20%-80%) Important services provide both a public, as well as individual, benefit to the program or service user.

The City should provide these services at a shared funding strategy that requires the participant to pay a portion of the cost through user fees. Additionally, the City may utilize grants or partner funding to

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:
augment the cost of the program/service. The City should subsidize these programs/services with the General Fund based on a targeted percentage of cost recovery.

Individual Benefit Services = Value Added Direct Cost Recovery (80%-100%) Value added services primarily provide an individual and private benefit to the program or service user. Consequently, the City should recover the cost of providing these programs and services through user and rental fees. Additionally, the City may provide value added programs when outside funding, grants, or sponsorships exist that substantially offset the cost of providing these programs. Pricing for these programs, services, or facility use should be established based on a consideration of cost to the City and market rate for comparable programs, services, or facility use.

PRICING METHODOLOGIES
Pricing programs, services, and use of facilities should be based on a consideration of both direct and indirect cost to City of Santa Barbara as well as the “market-based value” of the service. Pricing should be evaluated annually, and comparison rates should be considered during that process as needed. Flexibility is needed to maximize Department revenues and to respond to changing market conditions such as demand versus capacity, weather, changes to the cost of providing the service, and/or additions or changes to existing programs.

Pricing Options to consider:
 Differential between resident and non-resident rates
 Prime time/non-prime time rates
 Group or Volume Discount rates
 In season/off season rates
 Increase the minimum numbers required to hold the program (low cost-high volume approach) to spread cost to more people while keeping price the same  Reduce the staffing or material cost or length of a program/service to keep existing price  Change the City/Contractor percentage split to increase revenue to the City

NON-RESIDENT FEE DIFFERENTIAL
The criteria for establishing the differential percentage charged for non-residents for programs, services, or facility rentals will generally be as follows:
 A higher general fund subsidy by the City will justify a higher non-resident fee. Conversely, a lower non-general fund subsidy of a program or service will justify a lower or no fee differential.
 Higher demand by City residents or limitations in capacity will justify higher non-resident fees. Conversely, a low demand or high capacity will justify a lower or no fee differential.

CITY OF SANTA BARBARA
ADMINISTRATIVE POLICIES:

COST RECOVERY & REVENUE POLICY
Policy No.

Issued by: Date:
 Youth and teens attending schools in City of Santa Barbara should be considered residents.

ADMINISTRATIVE OVERHEAD COST RECOVERY (INDIRECT COSTS)
In addition to the direct cost recovery targets established for individual programs, the City should establish a percentage of cost recovery for programs, services, and facility use. The administrative overhead fee is designed to recover the proportional cost of the administration, marketing and advertising, and general support staff which contribute time and expense in supporting the programs.

In general, this fee should be established to recover an additional 5%-10% of the cost of the programs.

It is important to note this does not address building maintenance, replacement, etc.

FEE CHANGES
On an annual basis, coordinated with the City’s budget process, department staff will propose changes to existing fees, new fees, and deleting obsolete fees in line with this policy. The proposed fee changes will be presented to the Finance Committee for initial consideration. Proposed fee changes will also be presented to the City Council as part of the budget review process and adopted along with the annual budget.

Fee changes may be considered as part of a fee study as well as being annually adjusted based on a commonly used index for a specific type of fee or service, such as a consumer price index (CPI) inflationary assumption.

Fee changes can be considered outside of the annual budget review process as necessary and coordinated with the Finance Director and City Administrator.